Oil prices stabilized on Wednesday as investors assessed the impact of a meeting between the leaders of the top oil consumers, the U.S. and China, and anticipated production quota adjustments from the upcoming OPEC+ meeting.
Brent crude futures inched up by 0.2%, reaching $64.51 a barrel, while U.S. West Texas Intermediate crude futures rose by 0.1% to $60.21 at 1020 GMT.
China’s foreign ministry announced that Chinese President Xi Jinping would meet with U.S. President Donald Trump in Busan, South Korea on Thursday. The meeting was expected to inject new momentum into U.S.-China relations, with Beijing expressing readiness to collaborate for positive outcomes.
Additionally, China expressed openness to continuing cooperation with the U.S. on fentanyl, following Trump’s statement about reducing tariffs on Chinese goods in exchange for Beijing’s commitment to restrict exports of precursor chemicals.
Supporting the prices was the anticipated decline in U.S. crude and fuel inventories for the previous week. According to market sources citing American Petroleum Institute data, crude stocks dropped by 4.02 million barrels, gasoline inventories decreased by 6.35 million barrels, and distillate inventories fell by 4.36 million barrels from the previous week.
“The API report showing significant draws for crude and refined products last week in the U.S. is providing some modest support to prices,” noted UBS analyst Giovanni Staunovo.
Despite registering their largest weekly gains since June last week, doubts about the impact of sanctions on Russian oil companies and talk of a potential OPEC+ output increase led to a 1.9% decline in both Brent and WTI crude prices in the previous session.
Sources familiar with the OPEC+ talks revealed that the group is considering a modest output boost in December, with an additional 137,000 barrels per day being discussed.
On Tuesday, the CEO of Saudi state oil giant Aramco highlighted the robust demand for crude oil even before the sanctions were imposed on Russian oil majors, emphasizing that Chinese demand remained healthy.
In conclusion, the oil market continues to be influenced by geopolitical developments, production adjustments, and demand dynamics, as global leaders navigate through a complex energy landscape.
[Reporting by Ahmad Ghaddar, additional reporting by Sam Li, editing by Alexander Smith]
