NEW YORK (Reuters) - Oil prices rose on Tuesday after news that U.S. and Chinese officials discussed trade, while predictions for a weekly draw on U.S. crude stockpiles lent some support as well.
Brent crude futures LCOc1 gained 62 cents to settle at $64.27 a barrel, while West Texas Intermediate crude CLc1 rose 40 cents to end at $58.41 a barrel.
The United States and China are close to agreement on the first phase of a trade deal, U.S. President Donald Trump said on Tuesday, after top negotiators from the two countries spoke by telephone and agreed to keep working on remaining issues.
In the last few months, markets have swung back and forth, rallying on headlines suggesting the barest progress, even as an agreement has yet to be nailed down.
The discussions are taking place amid heightened tensions, with China saying it had summoned the U.S. ambassador on Monday to protest against the passage in the U.S. Congress of the Hong Kong Human Rights and Democracy Act.
“The main support for prices is the idea that if we get an easing in the trade war, the fear of slowing conditions and the impact on oil and fuel demand growth will be taken out of the market,” said Gene McGillian, vice president of market research at Tradition Energy in Stamford, Connecticut.
On the supply side, the Organization of the Petroleum Exporting Countries (OPEC) meets in Vienna on Dec. 5, followed by talks with the broader OPEC+ group featuring other producers that have agreed to cut output, including Russia.
The head of the International Energy Agency told Reuters that OPEC countries should make the right decision for a “very fragile” global economy.
Predicting strong oil production growth from the non-OPEC countries, especially the United States, Brazil, Norway and Guyana, Fatih Birol said: “There will be lots of oil in the markets. I hope they will make the right decision for themselves and for the global economy.”
U.S. crude inventories rose by 3.6 million barrels last week to 449.6 million, data from industry group the American Petroleum Institute showed late Tuesday. Analysts forecasts were for a decrease of 418,000 million barrels.
Official U.S. data is due to be released on Wednesday.
Graphic: U.S. crude inventories, weekly changes since 2017 png, here
Additional reporting by Bozorgmehr Sharafedin in London and Aaron Sheldrick in Tokyo; Editing by Marguerita Choy and David Goodman