Today, oil prices held near flat as the market wavered on the expectations that China and the United States would be able to reach a trade agreement as early as this month while waiting for the crude inventory data of the US government.
Some investors also weighed the efforts that were led by the Organization of the Petroleum Exporting Countries (OPEC) to tighten crude supply against the restart of the largest oilfield of Liby and the possibility of weaker demand from China.
The international benchmark, Brent, settled at $65.86 per barrel, an increase of 19 cents while U.S. West Texas Intermediate crude settled at $56.56 per barrel, a decline of 3 cents.
A senior commodities strategist at RJO Futures, Phillip Streible, stated: “Oil is still waiting for a deal to come back to table with China.”
Mike Pompeo., the U.S. Secretary of State, said that US President Donald Trump would turn down any trade deal that is not perfect. However, he added that the White House would continue working on an agreement.
In an interview with Sinclair Broadcasting Group, Pompeo stated: “Things are in a good place, but it’s got to be right.”
Supply curbs by the OPEC and allies helped in supporting crude. Last Monday, Russia said that it would be speeding up output cuts this month, and sources from the OPEC this week also said that the group would likely extend its output cut pact that has driven the oil prices approximately 20 percent higher this year.
An analyst at Price Futures Group in Chicago, Phil Flynn, stated: “By them kicking the can down the road, and not making a decision on production until June, the die has basically been cast for the start of U.S. summer driving season. You’d think that’d be pretty bullish.”
However, the restart of the El Sharara oilfield of Libya could offset some of the cuts. The field has a capacity of 315,000 barrels per day. It had been closed since December.
The market is expecting that the inventory reports of the United States will reveal increasing crude stockpiles. On average, analysts that were polled by Reuters estimated, that crude stocks increased by 1.2 million barrels in the week to the 1st of March.