TOKYO- Oil prices steadied on Tuesday as investors kept an eye on US inventory data due later, following two days of gains on positive economic data and hopes for a Washington-Beijing trade deal.
Brent crude futures were up 4 cents at $62.17 a barrel after gaining 0.7 percent in the previous session.
US crude futures were down 1 cent at $56.53 a barrel. They gained 0.6 percent on Monday.
“This is mostly position lightening after an impressive run higher,” said Jeffrey Halley, senior market analyst at OANDA.
“Oil is vulnerable now to any sharp change in short-term investor sentiment,” he said.
US crude oil inventories were forecast to have risen last week, while refined products stocks likely declined, a preliminary Reuters poll showed on Monday.
Five analysts polled by Reuters estimated, on average, that crude inventories rose around 2.7 million barrels in the week to Nov. 1.
Oil has been supported by hopes for a trade deal that could boost demand. Chinese President Xi Jinping and US President Donald Trump have been in continuous touch through “various means,” China said on Monday, when asked when and where the two leaders might meet to sign a trade deal.
Improved US jobs growth numbers in October and upward revisions of the two previous months are also helping oil prices, analysts said.
Oil investors are closely watching the initial public offering of Saudi Arabia’s state oil company, Saudi Aramco, in what is expected to be the world’s biggest listing as the kingdom seeks to cash in on peaking demand for oil.
Aramco’s chairman Yasser al-Rumayyan said on Sunday the state oil giant would continue to meet its global oil supply demand after it lists on the Riyadh bourse.
On the supply side, Russia cut its oil output to 11.23 million barrels per day (bpd) last month from 11.25 million bpd in September, but again missed its obligations under a pact to curb production.
The Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers – a group known as OPEC+ – have since January implemented a deal to cut oil output by 1.2 million barrels per day.
OPEC output rose in October from an eight-year low as a rapid recovery in Saudi Arabian production from attacks on oil plants more than offset losses in Ecuador and voluntary curbs under a supply pact, a Reuters survey found last week.
Hedge funds have started to become more optimistic about the outlook for oil prices amid hopes that the United States and China will reach a trade truce and the global economy will avert recession in 2019/20. – Reuters