SEOUL (Reuters) – Oil prices dropped on Wednesday after industry data showed a larger-than-expected build-up in U.S. crude stockpiles, but expectations for an easing of trade tensions between the United State and China capped losses.
FILE PHOTO: Pump jacks operate at sunset in Midland, Texas, U.S. February 11, 2019. REUTERS/Nick Oxford
Brent crude futures LCOc1 were at $62.73 a barrel by 0120 GMT, down 23 cents, or 0.4%, from their previous settlement. Brent settled up 1.3% at $62.96 a barrel.
U.S. West Texas Intermediate (WTI) crude CLc1 futures fell 21 cents, or 0.4%, from their last close to $57.05 per barrel. In the previous session, WTI settled 1.2% higher at $57.23 a barrel.
U.S. crude inventories rose by 4.3 million barrels in the week ended Nov. 1 to 440.5 million barrels, according to data from the American Petroleum Institute (API) released on Tuesday. That was nearly triple analysts’ forecast for an increase of 1.5 million barrels.
Official data from the Energy Information Administration (EIA) is due later on Wednesday.
However, hopes for a breakthrough on trade in talks between the United States and China, the world’s two biggest oil consumers, remained and kept price falls in check.
China is pushing U.S. President Donald Trump to drop more tariffs imposed on Beijing as part of a ‘Phase One’ U.S.-China trade deal, according to people familiar with the negotiations.
“Investors will continue to take cues from U.S.-China trade talks,” ANZ Research said in a note.
Looking ahead, next year’s oil market outlook may have upside potential, Mohammad Barkindo, Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC) said on Tuesday.
But in the next five years, OPEC would supply a diminishing amount of oil, squeezed by rising U.S. shale output and other rival sources, according to the oil producer group’s 2019 World Oil Outlook, released on Tuesday.
OPEC and its partners, including Russia, previously agreed to cut oil production by 1.2 million barrels per day (bpd) until March 2020. They will meet in early December to review output policy.
Reporting by Jane Chung; Editing by Kenneth Maxwell