Shafaq News
Oil prices held on to most gains from the previous session in Asian trading on Thursday as investors awaited the outcome of U.S.-China trade talks, hoping for signs that tensions clouding the outlook for world economic growth will ease.
Brent crude futures, which had risen 52 cents on Wednesday, fell 4 cents or 0.06% to $64.88 a barrel by 0402 GMT. U.S. West Texas Intermediate crude futures dropped by 9 cents or 0.15% to $60.39 after climbing 33 cents a day earlier.
U.S. President Donald Trump and China's leader Xi Jinping met at a South Korean air base in Busan for nearly two hours. The outcome of those discussions was not immediately clear.
"Any progress towards a trade agreement could bolster market confidence and stimulate global energy demand, providing some upside to oil," said Sugandha Sachdeva, founder of SS WealthStreet, a New Delhi-based research firm.
Trump said on Wednesday he expects to reduce U.S. tariffs on Chinese goods in exchange for Beijing's commitment to curb the flow of precursor chemicals to make the drug fentanyl.
Also helping lift the economic outlook, the U.S. Federal Reserve lowered interest rates on Wednesday, in line with market expectations. However, it signaled that might be the last cut of the year as the ongoing government shutdown threatens data availability.
"The Fed's decision underscores a broader turn in its policy cycle – one that favours gradual reflation and support over restraint, providing a tailwind to commodities sensitive to economic activity," Rystad Energy's chief economist Claudio Galimberti said in a note.
The gains by Brent and WTI in the previous session also reflected a larger-than-expected drawdown in U.S. crude and fuel inventories.
Both benchmarks are, however, on track for declines of about 3% in October, their third consecutive month of losses.
Crude inventories dropped by 6.86 million barrels to 416 million barrels in the week ended October 24, the EIA said, compared with analysts' expectations in a Reuters poll for a 211,000-barrel fall.
Another key focal point for investors is an OPEC+ meeting scheduled for November 2, where the alliance will likely announce another 137,000 barrels per day supply hike for December.
The group has boosted output targets by a total of over 2.7 million barrels per day - or about 2.5% of global supply - in a series of monthly increases since April. That is just under half the 5.85 million bpd cumulative cuts in supply the group had agreed to in preceding years.
(Reuters)
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