Oil rises amid optimism around US-Sino talks
Gains add to a surge on Wednesday driven by improved activity in China’s services sector
Tokyo — Oil prices rose on Thursday, rebounding from earlier losses, after the US confirmed that talks with China to reach a trade agreement would be held in the coming weeks, giving hope that a dispute that has roiled global economies will be resolved.
The gains add to a surge in prices on Wednesday that had been driven by a survey showing activity in China’s services sector expanded at the fastest pace in three months in August, as new orders rose in the world’s second-biggest consumer of oil.
Brent crude was up 21 cents, or 0.4%, at $60.91 a barrel by 3.01am GMT. On Wednesday, Brent rose 4.2%.
West Texas Intermediate (WTI) was up 17 cents, or 0.3%, at $56.43 a barrel, having risen 4.3% the previous session, the biggest percentage gain in nearly two months.
Both contracts were lower earlier in the Asian trading session after data late on Wednesday from the American Petroleum Institute (API) showed US crude stocks rose last week, against expectations of a decline.
US trade representative Robert Lighthizer and treasury secretary Steven Mnuchin spoke with Chinese vice premier Liu He and agreed to hold ministerial-level trade talks in Washington “in the coming weeks”, a trade representative spokesperson said late on Wednesday.
Shortly after in Beijing, China’s commerce ministry said the talks would be held and “both sides agreed that they should work together and take practical actions to create good conditions for consultations”.
As the trade war between the US and China has rumbled on into a second year, evidence has been mounting that economies worldwide are being hit, prompting downgrades of oil demand growth expectations.
BP CFO Brian Gilvary said global oil demand is expected to grow by less than 1-million barrels per day in 2019 as consumption slows.
Still, supply looks set to stay constrained as Russian officials and Opec sources indicated the countries remain committed to an agreement to rein in production to support prices.
Crude inventories in the US rose by 401,000 barrels in the week ended August 30 to 429.1-million, compared with analysts’ expectations for a decrease of 2.5-million barrels.
Crude stocks at the Cushing, Oklahoma, delivery hub fell by 238,000 barrels, while refinery crude runs fell by 306,000 barrels per day, API said.