Oil prices have edged down below $66 as traders await the outcome of the G20 summit and a meeting of the Organization of the Petroleum Exporting Countries (OPEC) and other crude producers to decide on a deal with regard to an extension of output cuts.
Brent crude declined 75 cents at $65.74, while US West Texas Intermediate crude slipped 64 cents to $58.74, Reuters reported.
US President Donald Trump said that a trade agreement with Chinese President Xi Jinping may take place this weekend but US tariffs may be imposed on most remaining imports from the country in case of any disagreement between the countries.
Tamas Varga of PVM told Reuters: “A complete breakdown of the talks will have a negative impact on the financial markets and also on oil, but the sell-off in risky assets should be short-lived.
“Oil bulls might have to wait until the second half of next week to start firing (on) all cylinders.”
Following the release of the latest US petroleum supply report that highlighted a larger-than-expected drop in crude stocks, oil prices increased by more than 2%. Inventories declined 12.8 million barrels, which is against analyst expectations of a decsrease by more than 2.5 million barrels.
According to traders, uncertainty over a trade breakthrough at the G20 summit and doubts about continued production cuts by the OPEC and its allies were crimping follow-through buying. After the G20 summit concludes, the oil cartel and allies including Russia will meet to discuss on a deal to extend production cuts to support oil prices.