Picture: REUTERS
Picture: REUTERS

London — Oil prices were broadly steady on Wednesday as data suggesting a smaller-than-expected fall in US crude inventories countered support from hopes for a US-China trade deal.

Brent crude futures were down 18c at $61.96 a barrel by 8.39am GMT. US West Texas Intermediate (WTI) crude fell 5c to $53.85 a barrel. On Tuesday, it had recorded its biggest daily rise since early January.

After weeks of swelling, US crude stocks fell by 812,000 barrels last week to 482-million, industry group the American Petroleum Institute (API) said on Tuesday, a smaller fall than the 1.1-million barrel drop analysts had expected.

PVM said a price rally had run out of steam “as concerns over bulging US oil stockpiles return to the fore”.

Estimates on US crude stockpiles from the US Energy Information Administration (EIA) are due on Wednesday.

US President Donald Trump offered some support, by saying preparations were starting for him to meet Chinese President Xi Jinping next week at the G20 summit in Osaka, Japan. Talks between the US and China broke down last month after Washington accused the Chinese of backing away from previously agreed commitments.

Interaction between the two sides has been limited since then. Trump has repeatedly threatened to slap more tariffs on Chinese goods.

European Central Bank (ECB) president Mario Draghi also offered a boost, saying on Tuesday that the central bank would ease policy again if inflation failed to accelerate.

Elsewhere, tensions in the Middle East after last week’s tanker attacks remain high. Fears of a confrontation between Iran and the US have mounted since last Thursday’s attacks. Washington has blamed Tehran, which has denied any role.

Trump said he was prepared to take military action to stop Iran having a nuclear bomb but left open whether he would approve the use of force to protect Gulf oil supplies.

The US is deploying about 1,000 more troops to the Middle East, saying it is a defensive move in response to what Washington says is concerns about a threat from Iran.

Members of oil cartel Opec have agreed to meet on July 1, followed by a meeting with non-Opec allies on July 2, after weeks of wrangling over dates. Opec and its allies will discuss whether to extend a deal on cutting 1.2-million barrels per day (bpd) of production that runs out this month.