Oil retreats from four-month highs on reported U.S.-China summit delay
LONDON (Reuters) - Oil futures reached four-month highs on Thursday, but later dipped after a report that a meeting between the U.S. and Chinese presidents to resolve a trade dispute had been delayed.
The Bloomberg story, citing unnamed sources, curbed a price rally fueled by production curbs by OPEC and its partners along with U.S. sanctions on Iran and Venezuela that have tightened global supplies this year.
Brent crude hit a 2019 peak of $68.14 per barrel before falling to $67.47 by 1035 GMT, down 8 cents or 0.12 percent from Wednesday’s close.
U.S. West Texas Intermediate (WTI) crude futures were at $58.11 per barrel, down 15 cents or 0.26 percent.
Bloomberg reported that U.S. President Donald Trump and Chinese President Xi Jinping may not meet until April at the earliest, after the Wall Street Journal said this month that Xi and Trump could meet around March 27.
No official announcement about the meeting had been made by either side.
A continuation of the tariff war between the world’s top two economies could dent growth in fuel demand and dent prices.
The Organization of the Petroleum Exporting Countries and some non-aligned producers including Russia have been withholding oil supply since the start of the year to tighten global markets.
Meanwhile, a political and economic crisis worsened by U.S. sanctions has slashed Venezuelan crude exports.
Two sources told Reuters that the United States also aims to curb Iran’s crude exports by about 20 percent to below 1 million barrels per day (bpd) from May, likely reining in waivers for Tehran’s remaining customers.
“With OPEC’s cuts in full swing ... persistent supply issues and a deteriorating picture on Venezuela, oil is looking well supported,” said Jasper Lawler, head of research at futures brokerage London Capital Group.
BNP Paribas strategist Harry Tchilinguirian told the Reuters Global Oil Forum: “Buyers with (Iran oil) waivers are likely going to hold back until there is more clarity in the U.S. administration’s position.”
An unexpected dip in U.S. crude oil inventories and production supported prices, traders said.
The U.S. Energy Information Administration (EIA) said U.S. commercial crude oil inventories fell last week as refineries hiked output.
U.S. crude oil production dipped by 100,000 bpd to 12 million bpd.
(GRAPHIC: U.S. oil production & storage levels - tmsnrt.rs/2Vanxza)
Reporting by Noah Browning; Additional reporting by Henning Gloystein; Editing by Dale Hudson and Kirsten Donovan