Mubasher: Oil prices retreated on Wednesday, after industry figures revealed an unexpected rise in US crude inventories, yet optimism regarding the signing of “Phase One” trade deal between the US and China capped further slide, according to Reuters.
By 7:10 am GMT, US Nymex crude futures declined by 0.15% to $58.32 per barrel (pb), while international benchmark Brent futures went down by 0.11% to $64.20 pb.
A weekly report from industry-funded group the American Petroleum Institute (API) on late Tuesday showed a buildup of 3.6 million barrels in US crude stockpiles, totalling 449.6 million in the week to 22 November.
This came contrary to Reuters-polled analysts’ expectations of a drawdown of 418,000 barrels.
Wednesday’s declines came as a reversal to two sessions of gains, with Nymex surging by 1.1% through Tuesday, and Brent advancing by 1.4% during the period.
Oil markets were bullish after prospects of a soon preliminary agreement to end a crippling trade conflict between the US and China, the world’s top oil consumers.
US President Donald Trump said on Tuesday that Washington and Beijing are close to clinch a first phase deal, after senior officials from both sides held discussions by telephone and agreed to resume talks on remaining issues.
“Strong builds in US inventories have kept bullish gains measured as markets remain cautious over shaky economic fundamentals and demand-side concerns,” Singapore-based brokerage Phillip Futures analyst Benjamin Lu was quoted by Reuters.
The US Energy Information Administration (EIA) releases its official inventory figures later in the day.
The commodity remained well supported in the middle of US-Sino trade hopes as well as the odds of extending supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and allied producers, Lu said.
OPEC members and non-affiliated exporters, or the so-called OPEC+ alliance, will be meeting on 4 December in Vienna to review production policy.
This will be followed by a meeting of the OPEC+ group on 6 December, in which a final decision on the future policy will be announced, while it is expected that supply restraints will be extended until mid-2020.
