Oil prices rise after US confirms trade talks with China to start(Update 2)


  • Energy
  • Thursday, 05 Sep 2019

Brent crude was up 21 cents, or 0.4%, at $60.91 a barrel by 0301 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.

TOKYO: Oil prices rose on Thursday, rebounding from earlier losses, after the U.S. 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 0301 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 U.S. crude stocks rose last week, against expectations of a decline.

U.S. Trade Representative (USTR) 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 USTR spokesman 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 United States 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 Plc's Chief Financial Officer Brian Gilvary told Reuters on Wednesday that 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 sources from the Organization of the Petroleum Exporting Countries (OPEC) indicated the countries remain committed to an agreement to rein in production to support prices.

Crude inventories in the United States rose by 401,000 barrels in the week ended Aug. 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.- Reuters

Previous report:

TOKYO: Oil prices fell on Thursday, giving up some of the strong gains of the previous session, after an industry report showed U.S. crude stockpiles rose last week, against analyst expectations of a decline.

Brent crude was down 18 cents, or 0.3%, at $60.52 a barrel by 0040 GMT. On Wednesday, Brent rose 4.2 percent.

West Texas Intermediate (WTI) was down 23 cents, or 0.4%, at $56.03 a barrel, having risen 4.3% the previous session, the biggest percentage gain in nearly two months.

"Oil bulls can't seemingly catch a break after the rally sapping surprising build in the American Petroleum Institute oil inventory survey has throttled WTI upward momentum dead in its tracks," said Stephen Innes, Asia Pacific market strategist at AxiTrader. U.S. crude stocks rose last week, while gasoline inventories decreased and distillate stocks drew, data from industry group the American Petroleum Institute (API) showed on Wednesday.

Crude inventories rose by 401,000 barrels in the week ended Aug. 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.

Oil prices surged on Wednesday after a survey showed that activity in China's services sector expanded at the fastest pace in three months in August as new orders rose.

China is the world's second-largest oil consumer and largest importer.

But as evidence mounts that the trade war between the United States and China is hitting economies worldwide, oil demand growth expectations have been trimmed.

BP Plc's Chief Financial Officer Brian Gilvary told Reuters that global oil demand is expected to grow by less than 1 million barrels per day in 2019 as consumption slows.

U.S. President Donald Trump also warned on Tuesday he would be "tougher" on Beijing if he wins a second term should trade talks drag on, adding to fears of a possible U.S. recession.

Still, supply looks set to stay constrained as Russian officials and sources from the Organization of the Petroleum Exporting Countries (OPEC) indicated the countries remain committed to an agreement to rein in production to support prices. - ReutersEarlier report:

NEW YORK: Oil prices rose more than 4% on Wednesday, boosted by a wider market pickup on positive news from China, after three days of losses due to fears about a weakening global economy.

Brent futures rose US$2.44, or 4.2%, to settle at $60.70 a barrel, while U.S. West Texas Intermediate (WTI) crude gained $2.32, or 4.3%, to $56.26.

That was the biggest daily percentage increase for WTI since July 10.

Stock indexes worldwide rebounded as easing geopolitical concerns and upbeat economic data from China brought buyers back to the equities market.

A private survey showed that activity in China's services sector expanded at the fastest pace in three months in August as new orders rose, prompting the biggest increase in hiring in more than a year.

In addition, investor risk appetite was further revived after Hong Kong withdrew the contentious extradition bill at the heart of recent protests.

China is the world's second-largest oil consumer and largest importer.

In the United States, crude stockpiles were expected to have declined for a third straight week, a Reuters poll showed, ahead of weekly data from the American Petroleum Institute (API) on Wednesday and the government on Thursday. Both reports are delayed a day due to the U.S. Labor Day holiday.

Some analysts, however, noted overall fundamentals of the oil market remained discouraging.

"Oil prices however remain focused on the trade war and the longer we don’t see a date scheduled for a face-to-face meeting between Chinese and U.S. officials, the greater the odds we could see a retest of the summer lows," Edward Moya, senior market analyst at OANDA in New York, said in a report.

U.S. President Donald Trump warned on Tuesday he would be "tougher" on Beijing in a second term if trade talks dragged on, compounding market fears that trade disputes between the two countries could trigger a U.S. recession.

U.S. data released on Tuesday showed manufacturing activity contracted in August for the first time in three years, while euro zone activity shrank for a seventh month.

"Crude oil remains troubled by reports that production from OPEC, Russia and the U.S. all rose last month. This (comes) at a time when the strength of demand growth, due to trade war pessimism, has increasingly been called into question," Saxo Bank commodity strategist Ole Hansen said.

BP Plc's Chief Financial Officer Brian Gilvary told Reuters that global oil demand is expected to grow by less than 1 million barrels per day (bpd) in 2019 as consumption slows.

But supply looks set to stay constrained as Russian officials and sources from the Organization of the Petroleum Exporting Countries indicated the countries would remain committed to their agreement to rein in production despite a shake-up in Saudi Arabia's oilindustry.

In a possible sign of tension easing in the energy-rich Gulf, Iranian state television reported on Wednesday that Tehran would free seven crew members of the detained British-flagged tanker Stena Impero.

The vessel was seized two weeks after Britain detained an Iranian tanker off the territory of Gibraltar which was released in August. - Reuters


   

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