Oil traded near $65 a barrel as investors weighed a surprise gain in American crude inventories against optimism over trade talks between the U.S. and China after the Asian nation signaled it’s open to dialogue.
Futures in New York were little changed after a 3 percent decline on Wednesday. U.S. crude inventories rose by 6.81 million barrels last week, while those at the Cushing storage hub in Oklahoma expanded for the first time since May, the Energy Information Administration reported. China said it welcomes communication with the U.S., and its vice commerce minister will lead a delegation to America in late August.
Oil is trading near the lowest level in 10 weeks amid speculation an escalating trade conflict between the U.S. and China will slow economic growth and sap energy demand. U.S. sanctions on Iran, which are set to snap back in November, remain a concern even though the International Energy Agency said fears of global supply shortages receded after the Organization of Petroleum Exporting Countries and other producers boosted output.
“An increase in crude inventories, despite record refinery crude processing, has had a big impact” on the market, Takayuki Nogami, chief economist at Japan Oil, Gas and Metals National Corp., said by phone from Tokyo. “Instead of escalating the trade war, China says it will put talks on the table. That may stem any damage to economic growth, and limit its impact on oil demand.”
West Texas Intermediate crude for September delivery traded up 0.2 percent at $65.04 a barrel on the New York Mercantile Exchange at 11:02 a.m. in Tokyo. The contract declined $2.03 to $65.01 on Wednesday. Total volume traded was in line with the 100-day average.
Brent for October settlement traded at $71.21 a barrel on the London-based ICE Futures Europe exchange, up 45 cents. Prices dropped $1.70 to $70.76 on Wednesday. The global benchmark crude traded at a $6.62 premium to WTI for the same month. — Bloomberg