Oil Prices Boosted by U.S.-China Trade Talks

• Oil prices rose Wednesday after the U.S. and China appeared to make progress toward resolving their trade dispute, triggering optimism for the global macroeconomic outlook.

• Brent crude, the global oil benchmark, was trading up 2% at $59.89 a barrel on London’s

Intercontinental Exchange

its highest level in more than three weeks.

• West Texas Intermediate futures, the U.S. oil standard, were up 2.4% at $50.95 a barrel on the New York Mercantile Exchange.


Global Markets: European and Asian stocks extended their gains Wednesday as the U.S. and China held their third day of trade discussions, with investors hopeful that progress was being made. President Trump tweeted on Tuesday that talks with China were going “very well.” The trade dispute had rattled confidence in the outlook for global economic growth, with a knock-on negative effect on oil demand that sent markets lower at the end of last year. “The fall in oil prices at the end of 2018 was driven not only by the oversupply, but also by the selloff on the stock markets,” said


in a daily note. “This was due to fears that the trade conflict will slow economic growth in the U.S. and China, ultimately also dampening oil demand in the two leading oil consumer countries.”

The Bashneft PAO oilfield near Neftekamsk, Russia.

The Bashneft PAO oilfield near Neftekamsk, Russia.


Andrey Rudakov/Bloomberg News

U.S. Inventories: The American Petroleum Institute reported Tuesday that U.S. oil inventories fell 6.1 million barrels last week, but gasoline supplies rose by 5.5 million barrels. Official data from the Energy Information Administration is due later Wednesday. A WSJ survey indicates the report will show crude supplies fell by 1.8 million barrels, while gasoline supplies increased by 2.2 million barrels.


Oil Balance: Crude prices have whipsawed in recent weeks, between fears of oversupply with a weakening demand outlook, versus optimism that output cuts by the Organization of the Petroleum Exporting Countries and its allies, along with a resolution to the U.S. and China trade dispute, will cancel out any glut. “We’re not anticipating any large stock builds in Q1, we’re looking for a fairly balanced market,” said Paul Horsnell, head of commodities research at

Standard Chartered

A combination of OPEC cuts and slowing U.S. production growth will help balance the market, Mr. Horsnell added.


• The U.S. Energy Information Administration releases its weekly petroleum status report at 10.30 a.m. ET Wednesday.

Write to Sarah McFarlane at


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