Oil erased gains after a U.S.-China meeting to end the nations’ trade war was said to have been pushed back.
Futures fell in New York, erasing an earlier gain of 0.7 percent. A meeting between President Donald Trump and his Chinese counterpart Xi Jinping to sign an agreement to end their trade war is more likely to happen in April at the earliest, three people familiar with the matter said. Crude had closed at a four-month high on Wednesday after an unexpected drop in U.S. inventories.
Crude has surged nearly 30 percent this year as the Organization of Petroleum Exporting Countries and its allies cut production. Yet the rally has been limited by continued trade tensions between the world’s two largest economies — which could hurt oil-demand growth — and record U.S. production.
West Texas Intermediate for April delivery was 14 cents lower at $58.12 a barrel on the New York Mercantile Exchange at 10:49 a.m. in London. The contract rose $1.39 to $58.26 on Wednesday, the highest close since Nov. 12.
Brent for May settlement lost 2 cents to $67.53 a barrel on the London-based ICE Futures Europe exchange. The contract climbed 88 cents to $67.55 on Wednesday. The global benchmark crude traded at a $9.09 premium to WTI for the same month.
U.S. Trade Representative Robert Lighthizer this week pointed to “major issues” still unresolved in the talks with China, with few signs of a breakthrough on the most difficult subjects including treatment of intellectual property. Chinese officials have also bristled at the appearance of the deal being one-sided, and are wary of the risk of Trump walking away even if Xi were to travel to the U.S.
Other oil-market news: As well as the unexpected drop in U.S. crude inventories, gasoline stockpiles declined by 4.62 million barrels last week, the steepest decrease since October, according to the Energy Information Administration. While the nation’s crude production fell by 100,000 barrels last week to 12 million barrels a day, the first decline in three months, it remains near an all-time high. Shanghai crude futures for April delivery rose 1.6 percent to 452.7 yuan a barrel, after gaining 0.3 percent on Wednesday. Russia is about halfway toward meeting its target for oil-output cuts under the OPEC+ deal, with only a couple of weeks remaining to fulfill its pledge.