Oil prices are set for solid weekly gains since early July on encouraging signs for trade talks between the US and China.
Brent crude increased 8 cents, or 0.1%, to $61.16 a barrel, while US West Texas Intermediate (WTI) crude futures fell 7 cents, or 0.1%, to $56.64 per barrel, Reuters reported.
The price gains were impacted on concerns over a slowdown in economic growth because of the US-China trade war and the flow-on to oil demand, even though dropping inventories suggest a balancing market.
However, both the countries gave indications that they will resume trade negotiations as the world’s two biggest oil consumers discussed the next round of in-person talks in September ahead of a deadline for further US tariffs.
The forecast of Hurricane Dorian towards Florida raised concerns that offshore US crude producers could shutter production if the storm progresses into the Gulf of Mexico over the weekend.
Chevron’s spokesman was quoted by Reuters as saying the company’s 356,440 barrel-per-day Pascagoula, Mississippi, oil refinery is closely monitoring the progress of Hurricane Dorian.
In July 2018 offshore oil firms stopped nearly 74% of production due to Hurricane Barry, leading to increased US crude prices.
Data from the US Government showed that crude stocks dropped last week by 10 million barrels to their lowest since October following slowdown in imports, while gasoline stocks decreased by 2.1 million barrels and distillate stockpiles, which include diesel and heating oil, fell by 2.1 million barrels.
The data showed that inventories at the country’s main delivery hub in Cushing, Oklahoma, slumped by about 2 million barrels last week to their lowest since December 2018.