Oil Holds Gains as US Signals Trade Talk Progress
Futures were little changed in New York after climbing 3.8% higher on Tuesday, the most since early January. The OPEC+ group is close to agreeing their next meeting should be in Vienna on July 1-2, which would end a one-month dispute about when they should sit down to discuss production policy for the latter half of this year. The U.S. and China said their leaders will meet in Japan next week to relaunch trade talks, stoking a rally in financial markets.
Oil
has slipped almost 19% since late April as the deepening U.S.-China trade spat
dented the demand outlook. The inability of the Organization of Petroleum
Exporting Countries and its allies to agree on a date for ministerial talks has
added uncertainty to turbulent markets. The dispute over timing has also played
out amid broader geopolitical tension after America and Saudi Arabia blamed
Iran for attacks on two tankers last week in the Gulf of Oman.
“We
may have seen a short-term bottoming in prices and optimism that trade talks
may resume could likely lift crude oil prices higher,” said Howie Lee, an economist
at Oversea-Chinese Banking Corp. in Singapore. News of the OPEC+ group nearing
a meeting date is supporting prices, while other uncertainties such as the
situation with Iran and the tankers is likely to add further long-term
volatility, he said.
West
Texas Intermediate for July delivery added 11 cents to $54.01 a barrel on the
New York Mercantile Exchange as of 8:09 a.m. London time. Futures rose $1.97 to
$53.90 on Tuesday, the biggest gain since Jan. 9.
Brent
for August settlement rose 8 cents to $62.22 a barrel on London’s ICE Futures
Europe Exchange. Futures closed 2% higher at $62.14 on Tuesday. The global
benchmark crude traded at a $8.04 premium to WTI for the same month.
The
compromise on the meeting date for the OPEC+ coalition, which pumps more than
half of the world’s crude, was proposed in a letter sent by OPEC’s president
and Venezuelan Oil Minister Manuel Quevedo. Members are close to agreeing on a
new timetable, a delegate said, asking not to be identified before a public
announcement.