Crude oil prices struggled to make headway and continue 2019’s bullish trend on Thursday, as the market digested the implications from a surprise surge in U.S. crude inventories last week.
Sentiment was positive ahead of an afternoon meeting between U.S. President Donald Trump and China’s top trade negotiator, vice-premier Liu He, but bears overturned an early morning recovery, pushing oil prices back down.
New York-traded West Texas Intermediate crude futures slipped 5 cents, or 0.1%, at $62.41 a barrel by 9:23 AM ET (13:23 GMT). Bullish momentum ran out of steam in New York trading. U.S. crude hit an intraday high of $62.77 earlier on Thursday, well above Tuesday’s closing price of $62.58.
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., slipped 4 cents, or 0.1%, to $68.97, pulling back from its intraday high of $69.50.
Supporting sentiment, Trump will meet China’s top trade negotiator at 4:30 PM ET (20:30 GMT) in Washington on Thursday.
White House economic adviser Larry Kudlow said on Wednesday that the two sides aim to bridge differences during high level talks that could extend beyond three days this week after “good headway” was made last week in Beijing.
While markets wait to see if U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and the Chinese vice-premiere can form the building blocks of an agreement for the two country’s leaders to sign off on, The Wall Street Journal cautioned that the U.S. insistence on keeping some tariffs in place on Chinese goods remains a key sticking point.
An unexpected surge of 7.2 million barrels in weekly crude stockpiles stateside initially snapped a three-day winning streak in U.S. oil prices, closing down 0.3% on Wednesday.
That data was sufficient for bulls to take a pause in the ongoing 2019 rally that saw WTI oil soar more than 30% in the first quarter.
Aggressive production cuts from OPEC and Russian-led allies have convinced traders that the global supply glut was on track to rebalance this year, while U.S. sanctions against Iran and Venezuela, along with power outages, contributed to the reduction in supply.
"There is a clear bias to the upside with the supply restrictions," said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
"And there's a much-better-than-expected demand picture after the recent China and U.S. PMI numbers, along with a potential kicker from any U.S.-China trade agreement," he added.
In other energy trading, gasoline futures fell 0.7% to $1.9385 a gallon by 9:29 AM ET (13:29 GMT), while Heating Oil inched up 0.03% to $2.0075 a gallon.
Lastly, natural gas futures traded down 0.2% to $2.673 per million British thermal unit.
-- Reuters contributed to this report.
