- Oil on the back foot amid no new updates on trade from Trump.
- Losses capped by Cushing inventories drawdown.
- Focus remains on trade headlines ahead of API Crude Stocks data.
WTI (oil futures on NYMEX) is seen extending its overnight softer tone into early Asia, uninspired by a lack of fresh updates on the US-China trade deal from the US President Trump.
The stalemate on the US-China trade deal re-ignites concerns about slower economic growth and its negative impact on the oil demand growth outlook, rendering oil-negative. US President Trump said “U.S. and Chinese negotiators were “close” to a “phase one” trade deal, but largely repeated well-worn rhetoric about China’s “cheating” on trade”, per Reuters.
The black gold also suffers amid ongoing strength in the US dollar across its main competitors, as safe-haven flows amid trade jitters continue to benefit the buck. A stronger greenback makes the USD-denominated oil more expensive for the holders in foreign currencies.
On Tuesday, the barrel of WTI reversed its 1% rally led by the crude inventory drawdown at the Cushing, the delivery point. The latest data from the market intelligence firm Genscape showed that crude inventories, fell by about 1.2 million barrels in the week to Nov. 8, snapping five straight weeks of increase.
Markets now await the US weekly Crude Stocks data due later today at 2130 GMT, as released by the American Petroleum Institute (API), for the next direction in oil prices. Meanwhile, the US-China trade-related developments will continue to influence the commodity.