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Oil drops 1 percent on U.S.-China trade talks, American supply surge

Reuters  |  LONDON 

By Browning

LONDON (Reuters) - prices fell more than 1 percent on Thursday due to the lack of any clear resolution to U.S.-trade talks and official data that again indicated vast fuel stocks in the

U.S. Intermediate (WTI) futures were at $51.66 per barrel at 0950 GMT, down 70 cents, or 1.3 percent, from their last settlement.

International Brent crude futures were also down 1.3 percent, or 79 cents, at $60.65 per barrel.

Both benchmarks rose by around 5 percent the previous day, capping off a week-long climb that marked oil's longest sustained rise since last summer.

Global financial markets had surged on hopes that and may soon end their dispute and avert an all-out trade war between the two biggest economies.

Some of the positive feeling ebbed on Thursday, however, a day after negotiations wrapped up with mildly positive statements from both sides but few details.

The U.S. Trade Representative's offices said in a statement on Wednesday that the two sides discussed "ways to achieve fairness, reciprocity and balance in trade relations".

said the talks "established a foundation for the resolution of each others' concerns".

of consultancy in said prices dropped "as optimism fuelled by the U.S.-trade talks earlier in the week appeared to have run its course, and official statements after the conclusion of three days of negotiations, while indicating modest progress, lacked details".

Meanwhile, U.S. cut its 2019 by more than 10 percent on Wednesday, pointing to weakening economic growth expectations and rising oil supply, especially from the

The now expects Brent to average $61 a barrel this year, down from a previous estimate of $69, and U.S. crude to average $54, against a prior forecast of $60.

The main source of new supply is the United States, where remained at a record 11.7 million barrels per day in the week ended Jan. 4, the said on Wednesday.

That has resulted in swelling fuel inventories.

The surge in U.S. production runs counter to efforts led by the Organization of the Petroleum Exporting Countries to cut supply and rein in an emerging glut.

"Balancing the market would require OPEC discipline to continue well into 2020," said.

(Reporting by Browning; Additional reporting by in Singapore; Editing by Dale Hudson)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, January 10 2019. 15:45 IST