Oil drops as US inventories grow and trade optimism limits losses
Economy News _ Baghdad
Oil fell on Wednesday after a report showed a surprise increase in US crude inventories, but optimism about the signing of the first phase of a US-China trade deal prevented a further fall in prices.
Brent crude futures were down 9 cents, or 0.14 percent, at $ 64.18 a barrel by 0725 GMT, while US West Texas Intermediate crude futures were down 12 cents, or 0.21 percent, at $ 58.29 a barrel.
Wednesday's losses reflected the oil's upward trend over the past two days, with WTI rising 1.1 percent to Tuesday and Brent 1.4 percent over the same period on expectations that the United States and China, the world's two biggest oil consumers, would soon sign a preliminary deal that would mark the beginning of the end of the war. The business has been going on for 16 months.
But API data released late on Tuesday showed that US crude oil inventories rose 3.6 million barrels in the week ending Nov. 22 to 449.6 million, compared with analysts' forecasts for a 418,000 barrel drop.
Benjamin Low, an analyst at Philip Futures in Singapore, said optimism about global trade, along with market expectations of an extension of supply cuts by OPEC and its allies, would support oil prices.
US President Donald Trump said on Tuesday that Washington and Beijing were close to agreeing on the first phase of a trade deal after top negotiators from both countries agreed to continue discussing the remaining issues.
The OPEC + group meeting on Dec. 6 will make a final announcement on future policy and the meeting is expected to result in an extension of the cuts, possibly until June.