LONDON: Oil prices rose about 1% on Wednesday, gaining for a second session, finding support from positive investor sentiment over U.S.-China trade talks to be held this weekend and signs of lower U.S. shale output.
Brent crude futures climbed 61 cents a barrel, or around 1%, to $62.76 a barrel by 0909 GMT, while U.S. West Texas Intermediate crude was up 71 cents, or 1.2%, at $59.8 a barrel.
The U.S. and China are due to meet in Switzerland this weekend, which could be the first step toward resolving a trade war disrupting the global economy.
“It is clear that hopes are high with respect to trade talks,“ said Bjarne Schieldrop, chief commodities analyst at SEB.
Both benchmarks plunged to four-year lows this week after OPEC+ decided to speed up output increases, stoking fears of oversupply at a time when U.S. tariffs have increased concerns about demand.
Still, some U.S. producers have signaled that they would cut spending, cautioning that the country’s oil output may have peaked, which is also contributing to the uptick in the market, analysts said.
“It’s also worth noting that the OPEC production increase at the weekend was fully priced in,“ Saxo Bank analyst Ole Hansen said.
The U.S.-China trade talks come after weeks of escalating tensions that have seen duties on goods imports between the world’s two largest economies soar well beyond 100%.
“However, volatility is expected to persist and the upside appears limited as OPEC+ will release barrels back to the market faster than expected and U.S. policymaking remains unpredictable,“ said Tamas Varga, an analyst at PVM, a brokerage and consulting firm.
U.S. government data on stockpiles is due at 10:30 a.m. ET (1430 GMT). Analysts polled by Reuters expect, on average, an 800,000-barrel decline in U.S. crude oil stocks for last week.
Crude stocks fell by 4.5 million barrels in the week ended May 2, market sources said, citing American Petroleum Institute figures on Tuesday.
