Oil unchanged after overnight losses amid caution over trade talks

Seoul: Oil prices were unchanged on Thursday, holding on to most of their losses from the previous session, on worries that a long-awaited interim deal to dial back a crippling US-China trade war could be delayed.

Brent crude futures LCOc1 were flat at USD 61.74 a barrel by 0158 GMT. Prices fell USD 1.22, or almost 2 per cent on Wednesday.

West Texas Intermediate crude CLc1 futures were at USD 56.32 a barrel, down 3 cents from their last close. They settled 88 cents lower, or 1.54 per cent, in the previous session on a larger-than-expected build in stockpiles.

US crude oil stockpiles rose 7.9 million barrels last week as refiners cut output and exports fell, beating analysts’ expectations for an increase of 1.5 million barrels, the Energy Information Administration (EIA) said on Wednesday.

Gasoline and distillate inventories dropped 2.8 million barrels and by 622,000 barrels respectively.

“The inventory builds and drops in exports is likely related to the COSCO sanctions,” said Stephen Innes, market strategist at AxiTraders, referring to the Chinese tanker firm the United States sanctioned, among others, in late September for alleged involvement in moving crude oil from Iran.

US crude exports fell nearly 1 million barrels last week to 2.4 million barrels per day.

“The sanctions are coming back to haunt oil bulls as a trifecta of negativity if you include the probable delay in signing the Phase one trade deal” between the world’s top two economies and biggest oil consumers, Innes said.

A meeting between US President Donald Trump and Chinese President Xi Jinping to sign an interim deal could be delayed until December as talks continue over terms and venue, a senior official of the Trump administration told Reuters on Wednesday.

It was still possible the “phase one” agreement aimed at ending a damaging trade war would not be reached, but a deal was more likely than not, the official said on condition of anonymity.

Expectations for a thaw in trade tensions have supported oil prices over the past several sessions.