Yemisi Izuora
Oil prices Thursday regained previous day’s losses after China announced plan to send a delegation to the US in an attempt to resolve trade disputes between the two countries which have roiled global markets.
Based on the anticipated negotiation, the U.S. West Texas Intermediate, WTI crude futures traded at $65.11 per barrel up 10 cents, or 0.15 percent, from their last settlement, while the international Brent crude oil futures were up 41 cents, or 0.6 percent, at $71.17 per barrel.
Both benchmarks lost more than 2 percent the previous day.
Traders said Thursday’s market moves followed in the slipstream of a statement by China’s Ministry of Commerce that it would send a delegation led by vice commerce minister Wang Shouwen to the United States for trade talks in late August.
The talks are at the invitation of the United States and will be held with U.S. Under Secretary of Treasury for International Affairs David Malpass, the commerce ministry said.
Still, sentiment in oil markets was broadly cautious due to a rise in U.S. crude production and storage levels and weakness in emerging economies, especially in Asia.
U.S. crude oil production and storage levels both rose last week, which traders said had pulled prices down.
Output of U.S. crude rose by 100,000 barrels per day (bpd) in the week ending Aug. 10, to 10.9 million bpd, according to the U.S. Energy Information Administration (EIA) weekly production and storage report.
At the same time, U.S. crude inventory levels climbed by 6.8 million barrels, to 414.19 million barrels, the EIA said.
“This build certainly hasn’t helped market sentiment,” Dutch bank ING said after the release of the EIA report.
While supply rose in the United States, Asia’s emerging markets were showing signs of economic slowdown due to trade disputes with the United States and currency weakness, dragging on oil market sentiment.
Despite a rise in China’s yuan after, the dollar held near a 13-month peak on Thursday as political turmoil in Turkey and concerns about China’s economic health continued to support safe-haven assets and weighed on emerging market currencies.
Providing Brent crude with some support were looming U.S. sanctions against Iran’s oil exports, set to start from November, with Asian buyers including India, South Korea and Japan already scaling back orders in anticipation.