Oil inches down as inventory data counters trade deal hopes

[June 19, 2019]  By Shadia Nasralla

LONDON (Reuters) - Oil prices ticked down on Wednesday as data suggesting a smaller-than-expected fall in U.S. crude inventories countered support from hopes for a U.S.-China trade deal.

Brent crude futures were down 46 cents at $61.68 a barrel by 1042 GMT.

U.S. West Texas Intermediate crude fell 3 cents to $53.87 a barrel. On Tuesday, it had recorded its biggest daily rise since early January.

After weeks of swelling, U.S. crude stocks fell by 812,000 barrels last week to 482 million, industry group the American Petroleum Institute said on Tuesday, a smaller fall than the 1.1 million barrel drop analysts had expected.

PVM said a price rally had run out of steam "as concerns over bulging U.S. oil stockpiles return to the fore."

Estimates on U.S. crude stockpiles from the U.S. Energy Information Administration are due on Wednesday. [EIA/S]
 

U.S. President Donald Trump offered some support, by saying preparations were starting for him to meet Chinese President Xi Jinping next week at the G20 summit in Osaka, Japan.

Talks between the United States and China broke down last month after Washington accused the Chinese of backing away from previously agreed commitments.

Interaction between the two sides has been limited since then. Trump has repeatedly threatened to slap more tariffs on Chinese goods.

European Central Bank President Mario Draghi also offered a boost, saying on Tuesday that the central bank would ease policy again if inflation failed to accelerate.

Pumpjacks are seen against the setting sun at the Daqing oil field in Heilongjiang province, China December 7, 2018. Picture taken December 7, 2018. REUTERS/Stringer

Elsewhere, tensions in the Middle East after last week's tanker attacks remain high. Fears of a confrontation between Iran and the United States have mounted since last Thursday's attacks. Washington blamed Tehran, which has denied any role.

Trump said he was prepared to take military action to stop Iran having a nuclear bomb but left open whether he would approve the use of force to protect Gulf oil supplies.

The United States is deploying about 1,000 more troops to the Middle East, saying it was a defensive move in response to what Washington says is concerns about a threat from Iran.

Members of the Organization of the Petroleum Exporting Countries have agreed to meet on July 1, followed by a meeting with non-OPEC allies on July 2, after weeks of wrangling over dates.

OPEC and its allies will discuss whether to extend a deal on cutting 1.2 million barrels per day of production that runs out this month.

(Graphic: U.S. crude inventories, weekly changes since 2017 - https://tmsnrt.rs/2XlX17b)

(Additional reporting by Aaron Sheldrick in TOKYO; Editing by Edmund Blair and Alexandra Hudson)

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