Crude oil prices edged higher on Thursday, amid hopes a fresh round of talks between the U.S. and China later this month would help diffuse trade tensions and allay fears about drop in demand for crude oil.
However, gains were just modest, as concerns about excess supply of crude oil in the market prompted traders to largely refrain from building up long positions.
China’s Ministry of Commerce said that a Chinese delegation led by vice commerce minister Wang Shouwen will travel to the U.S. in late August for trade talks to be held with U.S. Under Secretary of Treasury for International Affairs David Malpass.
Crude oil futures for September ended up $0.45, or 0.7%, at $65.46 a barrel.
Natural gas futures for September declined by 1.4% to $2.898 per million btu.
On Wednesday, crude oil futures ended down $2.03, or 3%, at $65.01 a barrel, after declining to a low of $64.51 in the session, after data from the Energy Information Administration showed an unexpected jump in U.S. crude stockpiles
EIA’s report showed that crude oil inventories rose by 6.8 million barrels in the week ended August 10, as against expectations for a drop of about 2.4 million barrels. Following the jump, total U.S. crude oil inventories stood at
414.2 million barrels as of last week.
As the second phase of U.S. sanctions on Iran is set to come into force in November, the OPEC decided in June to increase crude production.
Despite Saudi Arabia reducing its production in July, global oil production in the month rose by 680,000 bpd, with total production of OPEC countries rising by 41,000 bpd to 32.32 million bpd.
Besides rising ouput, the OPEC’s forecast that world oil demand will be about 1.43 million bpd in 2019, down from 1.64 million bpd in 2018, raised concerns about excess supply in the market.