SINGAPORE: Oil rose from near a two-month low as optimism the US and China can make progress in trade talks offset forecasts for a fourth weekly gain in American crude stockpiles.
Futures added 0.7% in New York after closing 0.1% lower Monday. Vice Premier Liu He, China’s chief trade negotiator, is set to meet with his US counterparts from Thursday.
American crude inventories expanded by 1.95 million barrels last week, in what would be the longest run of gains since February, according to the median estimate in a Bloomberg survey.
Oil posted a second quarterly loss in the three months ended September as a global economic slowdown dented demand.
The prolonged trade spat between Beijing and Washington has already almost halved oil consumption growth, Citigroup Inc said last month.
Asian stocks rose as China markets reopened after a weeklong holiday.
“Renewed purchases of US agricultural products by China in recent weeks has kindled hope that Beijing may secure a quid pro quo on parts of their trade” deal, said Vandana Hari, the founder of industry consultant Vanda Insights.
“It remains to be seen whether a piecemeal approach would be acceptable” to President Donald Trump, she said.
West Texas Intermediate for November delivery gained 37 cents to US$53.12 a barrel on the New York Mercantile Exchange as of 10.59am Singapore time.
The contract fell 6 cents to close at US$52.75 on Monday, near the lowest level since early August.
Brent for December settlement increased 42 cents, or 0.7%, to US$58.77 a barrel on the ICE Futures Europe Exchange after closing little changed on Monday.
The global benchmark crude traded at a US$5.69 premium to WTI for the same month.
Chinese officials are signalling they’re increasingly reluctant to agree to a broad trade deal pursued by President Trump, and a move by the US to place eight Chinese technology companies on a blacklist due to alleged human-rights violations may add to tensions between the two countries.
US crude stockpiles increased by 3.1 million barrels in the week through Sept 27 to 422.6 million, climbing for a third straight week, according to Energy Information Administration data.
It was the biggest weekly gain since May.