LONDON, June 11 — Oil prices rose to a seven-week high on Wednesday as markets assessed the outcome of United States (US)-China trade negotiations, while pessimism over US-Iran nuclear talks also provided support.
Brent crude futures were up 82 cents, or 1.2 per cent, to US$67.69 a barrel at 1028 GMT, while U.S. West Texas Intermediate crude was up 96 cents, or 1.5 per cent, to US$65.94.
After two days of intense negotiations in London, the United Kingdom, on Tuesday, US Commerce Secretary Howard Lutnick said that US and Chinese officials agreed on a framework to put their trade truce back on track and resolve China’s export restrictions on rare earth minerals and magnets.
The two countries are the world’s largest economies and oil consumers.
PVM analyst Tamas Varga said that trade-related downside risk in oil has been temporarily alleviated, although the market reaction has been tepid, as it remains unclear how economic growth and global oil demand will be impacted.
Meanwhile, US President Donald Trump said he is less confident that Iran would agree to stop uranium enrichment in a nuclear deal with Washington, according to an interview released on Wednesday.
For its part, Iran threatened to strike US bases in the Middle East if nuclear negotiations fail and conflict arises with the United States.
On the supply side, OPEC+ plans to increase oil production by 411,000 barrels per day in July as it looks to unwind production cuts for a fourth straight month.
“Greater oil demand within OPEC+ economies — most notably Saudi Arabia — could offset additional supply from the group over the coming months and support oil prices,” said Capital Economics’ analyst Hamad Hussain in a note.
Later on Wednesday, markets will be focusing on the weekly US oil inventories report from the Energy Information Administration.
US crude oil stocks fell by 370,000 barrels last week, according to market sources who cited American Petroleum Institute figures on Tuesday.
— Reuters
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