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Oil rises more than 2 pct on U.S.-China trade talk hope

Reuters  |  NEW YORK 

By Stephanie Kelly

NEW YORK (Reuters) - jumped more than 2 percent on Wednesday as the extension of U.S.-talks raised hopes of easing trade tensions between the two superpowers, but gains were capped by signs of rising U.S. refined product supply.

U.S. Intermediate (WTI) crude futures rose $1.38 to $51.16 a barrel, a 2.8 percent gain, the first time this year that WTI has topped $50.

Brent crude futures gained $1.34, or 2.3 percent, to $60.06 a barrel.

Prices pared gains after data from the showed domestic crude stockpiles fell less than expected last week. Gasoline and distillate inventories rose more than anticipated.

Crude inventories fell by 1.7 million barrels, smaller than the 2.8 million-barrel draw analysts had expected.

Gasoline inventories rose by 8.1 million barrels, far exceeding analysts' expectations in a poll for a 3.4 million-barrel gain. Distillate stockpiles rose by 10.6 million barrels, more than five times the expected 1.9 million-barrel increase, the EIA data showed.

"Because of the big builds in products, the report dampened the overall bullish enthusiasm we had earlier in the day," said Phil Flynn, an at in

Still, the day's sharp gains extended a rally that has pushed prices up more than 10 percent in 2019.

"After a dreadful December for risk markets, continues to catch a positive vibe," said at in Singapore, noting that investors were growing less fearful that U.S.-trade tensions would slow global economic growth and dampen demand for crude.

The trade talks in were carried over into an unscheduled third day, amid signs of progress on issues including Chinese purchases of U.S. farm and

Daily said was keen to end the trade dispute, but that any agreement must involve compromise.

also have received support from supply cuts by the Organization of the Petroleum Exporting Countries and allies including

The OPEC-led cuts, which officially began in January, are aimed at reining in an emerging glut as U.S. crude output has surged to a record 11.7 million bpd.

Top plans to lower its shipments further in February, Saudi told a conference in

cut its 2019 by more than 10 percent, with plentiful supply early in the year and slowing imports into China weighing on prices, the said in a note.

It now expects Brent to average $61 a barrel this year, and WTI to average around $54 per barrel.

(Reporting by in New York, Noah Browning in London and Henning Gloystein in Singapore; Editing by and David Gregorio)

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

First Published: Wed, January 09 2019. 21:57 IST