(Bloomberg) — Oil rose on the prospect of a de-escalation in the trade war between the world’s two largest economies and a stall in nuclear talks between the US and Iran.
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West Texas Intermediate futures added about 2% to top $62 a barrel after China signaled oppenness to trade negotiations with the Trump administration. Pre-conditions for the talks would include a more consistent US position and a willingness to address China’s concerns around American sanctions and Taiwan, according to a person familiar with the Chinese government’s thinking.
Elsewhere, Iran said it won’t be drawn into negotiations with the US over its ability to enrich uranium, reducing the potential of looser restrictions on Iranian crude.
“A bit of risk-on followed” the news of China’s openness to talks, said Ole Hansen, head of commodities strategy at Saxo Bank. “Overall, the market seems to be settling into a bit of a wait-and-see mode.”
Crude has recovered from a sharp drop to near the lowest in four years brought about by an onslaught of tariffs and counter-levies between the US and its biggest trading partners. Washington on Tuesday started a probe into the need for import taxes on critical minerals, while trade differences with the European Union persist as White House officials said the bulk of the US tariffs imposed on the bloc won’t be removed.
Meanwhile, Iraq plans to cut its oil exports this month as it faces growing pressure to adhere to its OPEC+ production target. The country aims to reduce shipments by 70,000 barrels a day, an official with knowledge of the matter said.
The industry-funded American Petroleum Institute reported US nationwide crude inventories rose by 2.4 million barrels last week, which would be the third consecutive advance if confirmed by official data later Wednesday. However, the report indicated declines at the oil storage hub in Cushing, Oklahoma, and in fuel inventories.
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