WTI near $54 as OPEC+ sets meeting date and trade talks revive

Oil held steady in New York after rising the most in more than five months as OPEC set a date for its next meeting after a month of bickering, and the U.S. and China signaled trade talks would resume.

Futures were little changed after climbing 3.8% on Tuesday. OPEC and its allies will hold their next meeting on July 1-2 to discuss production curbs. Extending the cuts would shrink global inventories by about 500,000 barrels a day in the second half of this year, according to an OPEC committee, helping boost prices. Separately, the U.S. and China said their leaders will meet in Japan next week to relaunch trade talks.

There’s “likely no escalation of the trade war in the near term, which reduces the oil demand concerns,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. “Tensions in the Middle East remain a concern as well.”

Oil has slipped about 19% since late April as the prolonged U.S.-China trade spat dented the demand outlook. Tensions in the Middle East, including the latest rocket attack near an Exxon Mobil Corp. workers’ camp in southern Iraq, are heightening market uncertainty. To prevent crude prices from falling, Saudi Arabia, Iraq and the United Arab Emirates -- OPEC’s three biggest members -- all want to keep restraining production amid signs of faltering demand.

West Texas Intermediate for July delivery dropped 3 cents to $53.87 a barrel on the New York Mercantile Exchange at 8:30 a.m. local time. Futures rose $1.97 to $53.90 on Tuesday, the biggest gain since Jan. 9.

Brent for August settlement fell 41 cents to $61.73 a barrel on London’s ICE Futures Europe Exchange, after closing 2% higher on Tuesday. The global benchmark traded at a $7.64 premium to WTI for the same month.

OPEC won’t have difficulty extending the oil-output cuts, but the discussions in the July meeting will focus on the duration of the next agreement, United Arab Emirates Energy Minister Suhail Al Mazrouei said in Abu Dhabi. His remarks echoed views expressed over the weekend by Saudi Energy Minister Khalid Al-Falih and earlier in the month by Iraqi Oil Minister Thamir Ghadhban.

Trade talks between the world’s two biggest economies continue to have a major influence on the market. U.S. President Donald Trump said Tuesday that he had a “very good” phone conversation with his Chinese counterpart Xi Jinping. The two leaders will hold an “extended meeting” at the G-20 summit in Osaka on June 28-29. Trump had repeatedly threatened more tariffs if Xi spurned the opportunity to talk.

© 2019 Bloomberg L.P.

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