Oil inches higher after China agrees to trade talks with the US
Singapore — Oil prices on Thursday recouped some of the previous day’s losses after Beijing said it would send a delegation to Washington in an attempt to resolve trade disputes between the US and China that have roiled global markets.
US West Texas Intermediate (WTI) crude futures traded at $65.11 a barrel at 2.09am GMT, up 10c, or 0.15%, from their last settlement.
International Brent crude oil futures were up 41c, or 0.6%, at $71.17 a barrel.
Both benchmarks lost more than 2% the previous day.
Traders said Thursday’s market moves followed in the slipstream of a statement by China’s ministry of commerce that it would send a delegation led by vice-minister of commerce Wang Shouwen to the US for trade talks in late August.
The talks are at the invitation of the US and will be held with US under secretary of treasury for international affairs David Malpass, the commerce ministry said.
Still, sentiment in oil markets was broadly cautious due to a rise in US crude production and storage levels and weakness in emerging economies, especially in Asia.
US crude oil production and storage levels both rose last week, which traders said had pulled prices down.
Output of US crude rose by 100,000 barrels a day in the week ending August 10, to 10.9-million barrels a day, according to the US Energy Information Administration (EIA) weekly production and storage report.
At the same time, US crude inventory levels climbed by 6.8-million barrels, to 414.19-million barrels, the administration said.
"This build certainly hasn’t helped market sentiment," Dutch bank ING said after the release of the administration’s report.
While supply rose in the US, Asia’s emerging markets were showing signs of economic slowdown due to trade disputes with the US and currency weakness, dragging on oil market sentiment.
Despite a rise in China’s yuan after, the dollar held near a 13-month peak on Thursday as political turmoil in Turkey and concerns about China’s economic health continued to support safe-haven assets and weighed on emerging market currencies.
Providing Brent crude with some support were looming US sanctions against Iran’s oil exports, set to start from November, with Asian buyers including India, South Korea and Japan already scaling back orders in anticipation.