Oil prices rose for a second day on Wednesday (October 22nd), rising about 2%, driven by rising US energy consumption and hopes for progress on a US trade deal with China and India.
Brent crude rose $1.29, or 2.1%, to $62.61 a barrel at 11:09 a.m. EDT (15:09 GMT), while US West Texas Intermediate crude rose $1.34, or 2.34%, to $58.58. US crude inventories fell during the week ending October 17th, according to the Energy Information Administration (EIA) on Wednesday.
Crude stocks fell by 961,000 barrels to 422.8 million barrels last week, compared with analysts' expectations in a Reuters poll for a 1.2 million-barrel increase. "That's impressive for the off-season," said Phil Flynn, senior analyst at Price Futures Group. "This shows the demand side of oil is strong, and the supply figures don't indicate this oversupply of oil, at least in the US."
Investors are also closely monitoring developments in US-China trade talks, as officials from both countries are set to meet this week in Malaysia. US President Donald Trump said on Monday that he hoped to reach a fair trade deal with Chinese President Xi Jinping, whom he will meet in South Korea next week. However, on Tuesday, Trump again added uncertainty to the meeting, saying it might not happen.
Meanwhile, supply concerns have grown amid news that a summit between Trump and Russian President Vladimir Putin has been postponed, and amid fears of disruption as Western governments pressure Asian buyers to reduce their purchases of Russian oil.
Trump said he spoke with Indian Prime Minister Narendra Modi on Tuesday, adding that Modi assured him that India would limit its oil purchases from Russia.
"Oil prices rose after reports showed the US and India were close to finalizing a trade deal that could see India gradually reduce imports of Russian crude, potentially boosting demand for other oils," said MUFG analyst Soojin Kim.
The Mint India newspaper reported on Wednesday that the two countries were close to reaching a long-delayed trade deal. The agreement would reduce US tariffs on Indian imports from 50% to 15-16%. (alg)
Source: Reuters
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