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Oil little changed as market awaits US-China trade deal
[SINGAPORE] Oil prices held near flat on Tuesday as the market wavered on expectations the United States and China could reach a trade agreement as early as this month while awaiting US government crude inventory data.
Investors also weighed Opec-led efforts to tighten crude supply against the restart of Libya's biggest oilfield and the prospect of weaker demand from China.
Brent, the international benchmark, settled at US$65.86 a barrel, up 19 cents. US West Texas Intermediate crude settled at US$56.56 a barrel, down 3 cents.
Prices edged lower in post-settlement trade after data from the American Petroleum Institute (API), an industry group, showed larger-than-expected US crude stockpiles.
Crude inventories rose by 7.3 million barrels in the week ending March 1 to 451.5 million, compared with analysts' expectations for an increase of 1.2 million barrels, API said. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 1.1 million barrels.
The US government's official figures are due on Wednesday.
"Oil is still waiting for a deal to come back to the table with China," said Phillip Streible, senior commodities strategist at RJO Futures.
US Secretary of State Mike Pompeo said President Donald Trump would reject any trade deal that is not perfect, but added the White House would keep working on an agreement.
Supply curbs by the Organization of the Petroleum Exporting Countries and allies helped support crude. On Monday, Russia said it would speed up output cuts this month, and Opec sources this week also said the group would likely extend its output cut pact that has driven oil prices about 20 per cent higher this year.
"By them kicking the can down the road, and not making a decision on production until June, the die has basically been cast for the start of US summer driving season. You'd think that'd be pretty bullish," said Phil Flynn, analyst at Price Futures Group in Chicago.
The restart of Libya's El Sharara oilfield could offset some of the cuts, however. The field, with a capacity of 315,000 barrels a day, had been closed since December.
Concern about an economic slowdown in China weighed on prices.
China's government said it was targeting economic growth of 6.0 to 6.5 per cent in 2019, lower than the 6.6 per cent growth reported last year and raising the prospect of slowing fuel demand.
"China's downward revision in their expected GDP gains for this year conjured up further ideas of smaller-than-expected oil demand increases in the coming months," Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.