By Georgina McCartney HOUSTON (Reuters) -Oil prices edged higher on Thursday, recovering from the previous day’s drop, on news that the U.S. and China agreed to more trade talks, following a phone call between U.S. President Donald Trump and Chinese leader Xi Jinping. Brent crude futures were up 35 cents, or 0.5%, at $65.21 a […]
Business
Oil rises as US, China teams to meet following Trump, Xi trade call
Audio By Carbonatix
By Georgina McCartney
HOUSTON (Reuters) -Oil prices edged higher on Thursday, recovering from the previous day’s drop, on news that the U.S. and China agreed to more trade talks, following a phone call between U.S. President Donald Trump and Chinese leader Xi Jinping.
Brent crude futures were up 35 cents, or 0.5%, at $65.21 a barrel at 1:14 p.m. EDT. U.S. West Texas Intermediate crude rose 38 cents, or 0.6%, to $63.23 a barrel.
“If we step back from the brink of a major trade war, it will increase demand expectations for oil both in the U.S. and in China,” said Phil Flynn, senior analyst with Price Futures Group.
Trump said on social media his call with Xi focused primarily on trade and led to “a very positive conclusion.” He announced further lower-level U.S.-China discussions, saying “there should no longer be any questions respecting the complexity of Rare Earth products.”
“We’re in very good shape with China and the trade deal,” he told reporters later.
The official Xinhua news agency reported earlier that the talks were held at Trump’s request.
The news encouraged investors a day after oil fell 1% as data showed U.S. gasoline and distillate stockpiles grew more than expected, reflecting weaker demand in the world’s largest economy. [EIA/S]
Geopolitical events and wildfires in Canada that threaten to reduce oil production are providing further price support, despite a potentially oversupplied market in the second half of the year with expected OPEC+ production hikes, PVM analyst Tamas Varga said.
Curbing gains on Thursday, Saudi Arabia, the world’s biggest oil exporter, cut its July prices for Asian crude buyers to nearly the lowest level in two months.
The Saudi price cut followed a move by OPEC+ last weekend to increase output by 411,000 barrels per day (bpd) for July.
The strategy of Saudi Arabia, OPEC’s de facto leader, is partly to punish over-producers by potentially unwinding 2.2 million bpd between June and the end of October, in a bid to wrestle back market share, Reuters previously reported.
Data on Wednesday showed the U.S. services sector contracted in May for the first time in nearly a year.
The number of Americans filing new applications for unemployment benefits increased for the week ending May 31, marking the second straight weekly jump, the Labor Department said on Thursday, citing softening labor market conditions amid mounting economic headwinds from Trump’s tariffs.
The release on Friday of the U.S. nonfarm payrolls report for May could influence the U.S. Federal Reserve’s interest rate policy, while the market’s focus will be also on geopolitical tensions in the Middle East, UBS analyst Giovanni Staunovo said.
(Reporting by Georgina McCartney in Houston, Enes Tunagur in London, Katya Golubkova in Tokyo and Emily Chow in Singapore; Editing by Tom Hogue, Emelia Sithole-Matarise, Ed Osmond, Paul Simao, David Gregorio and Richard Chang)