OIL prices ticked up on Tuesday after the United States (U.S.) market opened on anticipation that data due later would show decline in crude stocks.
Erasing earlier losses linked to concerns over waning demand, Benchmark Brent crude futures went up 32 cents at $65.18 a barrel. WTI crude futures rose 24 cents to $58.14 a barrel.
Sending a bullish signal, a preliminary Reuters poll showed on Monday that U.S. crude oil inventories likely fell for a second consecutive week last week.
The numbers came ahead of crude stock data from the American Petroleum Institute (API), an industry group, and the Energy Information Administration (EIA), an agency of the U.S. Department of Energy, due on today.
“The market is waiting for inventory data later today (yesterday). If we get a signal that declines are continuing that will be positive,” for oil prices, said Giovanni Stauvono, analyst at Swiss bank UBS.
Weighing on prices, hopes for progress in the trade war between China and the U.S. during this week’s G20 meeting were dampened by a senior U.S. official saying President Donald Trump was “comfortable with any outcome” from the talks.
“The likely failure to reach a mutually acceptable trade agreement will raise demand concerns that will dishearten oil bulls,” PVM analyst Tamas Varga said in a note.
Demand concerns were briefly overcome last week when Brent climbed five per cent and U.S. crude surged almost 10 per cent, its strongest week since 2016, after Iran shot down a U.S. drone, adding to tensions stoked by previous attacks on oil tankers in the area.
Washington has blamed the tanker attacks on Iran, which denies having any role.
Trump targeted Iranian Supreme Leader Ayatollah Ali Khamenei and other top Iranian officials with sanctions on Monday. Iran said this move closed the path of diplomacy.
Meanwhile, the Organisation of the Petroleum Exporting Countries (OPEC) and its allies including Russia appear likely to extend a deal on curbing output when they meet on July 1-2.
Russian Energy Minister Alexander Novak said international cooperation on crude production had helped stabilise oil markets and was more important than ever. He also expressed concerns about demand.
