Oil prices have remained steady due to weak demand concerns despite trade optimism on talks between the US and China.
Brent crude oil futures slipped six cents to $58.90 a barrel while US West Texas Intermediate (WTI) crude futures were flat at $53.31 a barrel, reported Reuters.
US President Donald Trump said that efforts to end a dispute with China were going smoothly as negotiators are working towards reaching a Phase 1 trade deal. Leaders from both countries are expected to sign in November 2019 when they meet at APEC summit.
Reuters quoted ANZ bank as saying: “Commodity markets were cautiously optimistic amid signs that a trade deal was close to being signed by the US and China.
“Crude oil prices remained in the doldrums, with ongoing economic weakness weighing on sentiment.”
Despite some signs of easing tensions between the two countries, US Commerce Secretary Wilbur Ross said that an initial deal need not be finalised immediately next month. Ross highlighted the need to get the right deal.
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Trade tensions increased as China seeks retaliatory sanctions of $2.4bn against the US for non-compliance with a World Trade Organization (WTO) ruling in a tax case dating back to the era of President Barack Obama.
Samsung Futures Seoul commodity analyst Kim Kwang-Rae said that oil prices are also under pressure as Russia again missed its target to reduce oil production last month.
Additionally, negotiations between the oil cartel members Kuwait and Saudi Arabia to restart production from jointly operated fields in the Neutral Zone have put downward pressure on prices.
A preliminary Reuters poll showed that US crude stocks are expected to have increased for a sixth consecutive week while it highlighted a slighter reduction in the distillates and gasoline stocks in the week ending 18 October.