Oil prices steady despite uncertainties over U.S.-China trade deal

Oil prices are stable on Thursday (Nov. 7th) after losses the previous day, as traders were cautious amid concerns over a potential delay in sealing a long-awaited interim U.S.-China trade deal and a huge increase of U.S. crude stockpiles, Reuters reports. 

Brent crude futures were down 3 cents, at $61.71 a barrel by 0348 GMT after settling down $1.22 per barrel, or almost 2% on Wednesday. 

West Texas Intermediate crude futures were at $56.29 a barrel, down 2 cents, from their last close. They settled 88 cents lower, or 1.54%, in the previous session. 

U.S. crude oil stockpiles rose 7.9 million barrels last week as refiners cut output and exports fell, beating analysts' expectations for an increase of 1.5 million barrels, the Energy Information Administration (EIA) said on Wednesday. 

Gasoline and distillate inventories dropped 2.8 million barrels and by 622,000 barrels respectively. 

“The inventory builds and drops in exports is likely related to the COSCO sanctions,” said Stephen Innes, market strategist at AxiTraders, referring to the Chinese tanker firm the United States sanctioned, among others, in late September for alleged involvement in moving crude oil from Iran. 

U.S. crude exports fell nearly 1 million barrels last week to 2.4 million barrels per day. 

“The sanctions are coming back to haunt oil bulls as a trifecta of negativity if you include the probable delay in signing the Phase one trade deal” between the world’s top two economies and biggest oil consumers, Innes said. 

A meeting between U.S. President Donald Trump and Chinese President Xi Jinping to sign an interim deal could be delayed until December as talks continue over terms and venue, a senior official of the Trump administration told Reuters on Wednesday. 

It was still possible the “phase one” agreement aimed at ending a damaging trade war would not be reached, but a deal was more likely than not, the official said on condition of anonymity.


Read also: Share prices slip as U.S.-China trade deal delayed


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