Crude climbed as U.S. President Donald Trump signaled a trade deal with China might be coming soon.
Futures rose as much as 1.6% on Wednesday in New York. President Trump said a trade deal with China will probably not be signed until a November meeting with Chinese President Xi Jinping at the APEC summit in Chile. Meanwhile, a weaker dollar also helped support the price of oil.
“The encouraging headlines surrounding the U.S.-China trade war and Brexit, seem more optimistic,” said Pavel Molchanov, a Houston-based analyst at Raymond James & Associates Inc. “In that sense, it’s perfectly reasonable for oil prices to show a bit of a bounce.”
Despite optimism on Wednesday, oil prices have been pushed lower by the ongoing trade war and fears over weak demand. The International Energy Agency warned that OPEC faces a “serious challenge” if it wants to defend oil prices next year, as fuel-demand growth could slow further and rival supplies continue to grow.
West Texas Intermediate for November delivery added 72 cents to $53.53 a barrel at 11:32 a.m. on the New York Mercantile Exchange.
Brent crude for December settlement rose 66 cents to $59.40 a barrel on the London-based ICE Futures Europe Exchange. The global benchmark traded at a premium of $5.80 to WTI for the same month.
The Bloomberg Dollar Spot Index fell for a second day, bolstering the appeal of commodities traded in the U.S. currency, such as oil.
Meanwhile, investors are also focused on U.S. inventories. The Energy Information Administration will release its tally of domestic stockpiles Thursday, while the industry-funded American Petroleum Institute will provide data later Wednesday.
“The market is expecting a bullish EIA report with crude draws and refinery draws,” said Ashley Petersen, an oil analyst at Stratas Advisors LLC in New York.
