Oil steadies as trade optimism counterweighs U.S. stockpile build

Oil had risen for the last two days on expectations that China and the United States. The producers, known as
27 Nov, 2019
  • Oil had risen for the last two days on expectations that China and the United States.
  • The producers, known as OPEC+, hold their next oil policy review meetings on Dec. 5-6 in Vienna.
  • Brent crude was up 15 cents at $64.42 a barrel by 1011 GMT.

Oil industry group the American Petroleum Institute on Tuesday said U.S. crude inventories rose by 3.6 million barrels, compared with analysts' expectations for a decrease. The U.S. government's supply report is due out later on Wednesday.

Brent crude was up 15 cents at $64.42 a barrel by 1011 GMT, while U.S. West Texas Intermediate crude was 2 cents higher at $58.43.

Oil had risen for the last two days on expectations that China and the United States, the world's two biggest crude oil users, would soon sign a preliminary agreement beginning an end to their 16-month trade dispute.

"Trade deal optimism persists," said Tamas Varga of oil broker PVM. "The belief in a positive trade deal continues unabated."

That was fuelled by comments on Tuesday from President Donald Trump, who said the United States and China are close to agreement after top negotiators spoke by telephone and agreed to keep working on remaining issues.

Attention will focus later on Wednesday on the U.S. government's weekly oil supply report from the Energy Information Administration, due at 1530 GMT.

"If the numbers are similar to the API, this would be the fifth straight week of stockbuilds, and would not be the most constructive reading for WTI as we head into the Thanksgiving holiday," ING analyst Warren Patterson said in a note.

Expectations that the Organization of the Petroleum Exporting Countries and allies such as Russia will maintain their deal to restrain supply are also supporting prices.

The producers, known as OPEC+, hold their next oil policy review meetings on Dec. 5-6 in Vienna.

They are expected to extend their supply cut agreement further into 2020.

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