Oil gains nearly 1% as optimism returns on US-China trade talks
Published Mon, Nov 25 20198:55 PM EST Updated Tue, Nov 26 20192:47 PM EST
Workers cross walkways between zones aboard an offshore oil platform in the Persian Gulf's Salman Oil Field, near Lavan island, Iran, on Jan. 5. 2017.
Ali Mohammadi | Bloomberg | Getty Images
Oil prices edged higher after news that U.S. and Chinese officials discussed trade on Tuesday, while predictions for a weekly draw on U.S. crude stockpiles lent some support as well.
, the international price benchmark, gained 60 cents, or 0.9%, to settle at $64.25, while West Texas Intermediate crude
gained 40 cents, or 0.7%, to settle at $58.41.
Top U.S. and Chinese trade negotiators held a phone call on Tuesday morning, China's commerce ministry said, as the two sides try to hammer out a so-called Phase 1 deal in a trade war that has dragged on for 16 months.
In the last few months, markets have swung back and forth, rallying on headlines suggesting the barest progress, even as an agreement has still not been nailed down.
The discussions are taking place amid heightened tensions, with China saying it had summoned the U.S. ambassador on Monday to protest against the passage in the U.S. Congress of the Hong Kong Human Rights and Democracy Act.
"The main support for prices is the idea that if we get an easing in the trade war, the fear of slowing conditions and the impact on oil and fuel demand growth will be taken out of the market," said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
On the supply side, the Organization of the Petroleum Exporting Countries (OPEC) meets in Vienna on Dec. 5, followed by talks with the broader OPEC+ group featuring other producers that have agreed to cut output, including Russia.
The head of the International Energy Agency told Reuters that OPEC countries should make the right decision for a "very fragile" global economy.
Predicting strong oil production growth from the non-OPEC countries, especially the United States, Brazil, Norway and Guyana, Fatih Birol said: "There will be lots of oil in the markets. I hope they will make the right decision for themselves and for the global economy."
U.S. crude stockpiles were expected to have declined 400,000 barrels last week, according to a Reuters poll of analysts, ahead of reports from the American Petroleum Institute (API), an industry group, on Tuesday, and the Energy Information Administration (EIA) on Wednesday.