Oil edged higher in a day of listless trading as investors parsed conflicting messaging on the progress of trade talks between the US and China.
West Texas Intermediate futures rose to settle near $63 a barrel, but still notched their third weekly loss in the past four. Chinese authorities are weighing removing additional levies on a number of products including ethane, according to people familiar with the matter, as economic costs mount for certain industries. Shares in China’s top buyers of the fuel from the US jumped.
Still, an agreement on trade between the US and China appears far off. President Donald Trump said Thursday that his administration was talking with China about trade, despite Beijing earlier denying the existence of negotiations and demanding that unilateral tariffs be revoked. The president later said that he wouldn’t drop tariffs on China unless “something substantial” is offered in return.
Oil has dropped sharply this month on concerns that Trump’s sweeping tariffs and retaliatory measures from trading partners including China will cripple economic activity and throttle energy demand. In an effort to reassure US oil firms, Energy Secretary Chris Wright said that the trade turmoil will be fleeting and that the administration fully supports more crude output.
“Our president is very clear and he wants lower energy prices,” Wright said during an interview with Bloomberg Television at an energy conference in Oklahoma City. Oil prices at $50 per barrel “in today’s world probably is not sustainable for our producers in this country.”
The president “wants American industry and American consumers to thrive,” he added.
The OPEC+ alliance has added to bearish headwinds by ramping up idled oil production, stoking fears of an oversupply. The group will meet on May 5 to discuss its output plans for June.
Still, some metrics are pointing to near-term strength in the oil market. The prompt spread for WTI has widened this month in a bullish backwardation structure, signaling tight supply. At the same time, top traders have been snapping up barrels that help set benchmark prices in different regions.
Oil Prices:
WTI for June delivery edged up 0.4% to $63.02 a barrel in New York.
Futures are down about 2.6% this week.
Brent for June settlement rose 0.5% to $66.87 a barrel.
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