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Oil prices rose on Tuesday after China signaled progress in trade talks with the United States, but gains were capped by bearish forecasts of a buildup in U.S. crude stockpiles.
FILE PHOTO: Oil rigs are seen at Vaca Muerta shale oil and gas drilling, in the Patagonian province of Neuquen, Argentina January 21, 2019. REUTERS/Agustin Marcarian
Brent crude oil LCOc1 was up 66 cents at $59.62 a barrel by 1337 GMT, while U.S. West Texas Intermediate crude CLc1 was 77 cents higher at $54.08 per barrel.
China and the United States have achieved some progress in their trade talks, Vice Foreign Minister Le Yucheng said on Tuesday, and any problems could be resolved as long as both sides respected each other.
“While the encouraging mood across financial markets will remain stimulated by trade optimism, risk aversion could still make an abrupt return should talks drag on or turn sour,” said Lukman Otunuga, analyst at FXTM.
The International Monetary Fund last week forecast that fallout from the U.S.-China trade war and trade disputes across the world would slow global growth in 2019 to 3.0%, the weakest in a decade.
Lower economic growth typically means reduced demand for commodities such as oil.
Prices were also pressured by forecasts of a buildup in U.S. crude stockpiles. Inventories are expected to have risen for a sixth straight week, while distillates and gasoline stocks likely fell in the week to Oct. 18, a Reuters poll showed. The poll was conducted ahead of reports from the American Petroleum Institute (API), an industry group, and the Energy Information Administration (EIA), an agency of the U.S. Department of Energy.—Reuters
