Futures Movers: Oil attempts to bounce higher on hope of U.S.-China trade progress
An earlier version of this article included incorrect release times for U.S. petroleum inventory data. The American Petroleum Institute releases its report Wednesday at 1:30 p.m. Eastern, while the Energy Information Administration report comes out Thursday at 11 a.m.
Oil futures rose cautiously higher Tuesday as investors awaited insights on progress in trade talks between China and the U.S. which may affect economic growth and oil demand.
President Donald Trump will speak at the Economic Club of New York at noon Eastern time, where he could provide the latest update on Sino-American trade talks amid renewed concerns that the phase-one trade deal may not involve a rollback of existing tariffs. Reuters reported that the U.S. president was expected to push back the date when he would decide on whether to place tariffs on cars and auto part imports from the European Union, citing European officials.
International trade tensions between the U.S., China and Europe have been a big headwind for oil prices as Trump’s import tariffs have contributed to slowing economic growth this year while supplies have been rising.
West Texas Intermediate crude for December delivery
picked up 50 cents, or 0.8%, to $62.68 a barrel on ICE Futures Europe, following a 0.5% skid for the international benchmark grade on Monday.
“Although there is some measure of cautious optimism over trade talks, mixed signals from both sides could strain global sentiment and investor confidence,” wrote Lukman Otunuga, senior research analyst at FXTM, in a daily research report.
Marshall Steeves, energy markets analyst at IHS Markit, said there is some expectation that Trump’s speech Tuesday “might hint at policy around tariffs and a Phase One deal, which is also buttressing financial markets in general,” but “how that actually plays out is another question.”
Helping to mitigate crude oil’s losses from Monday was a report from data provider Genscape, which reported that crude-oil inventories at key oil delivery point Cushing, Okla., were down 1.2 million barrels in the week to Nov. 8.
Looking ahead, investors will be watching for a report from the American Petroleum Institute due at 1:30 p.m. on Wednesday and the more closely followed Energy Information Administration report at 11 a.m. on Thursday, with both coming a day later than usual due to the U.S. Veterans Day holiday observed on Monday.
In addition to that data, a monthly report from the Organization of the Petroleum Exporting Countries is due on Thursday and the monthly International Energy Agency report is due on Friday, before a key Dec. 5-6 meeting of OPEC and major allies, including Russia, where potential for deeper production cuts will be discussed.