FX.co ★ Oil Rebounds as China Opens Door to Trade Talks

WTI crude oil futures experienced a recovery, reaching $62 per barrel on Wednesday. This increase came as optimism regarding potential renewed trade discussions between the US and China overshadowed existing pessimistic indicators concerning supply and demand. China has expressed willingness to engage in negotiations, but it is seeking certain assurances from Washington, including a more respectful tone and a designated negotiator who has the support of former President Trump. This development has buoyed hopes for a reduction in trade tensions, subsequently lending support to oil prices. Nevertheless, the International Energy Agency (IEA) has revised its 2024 global demand forecast downward and cautioned about the risk of an oversupply situation up to 2026. OPEC+ production levels have exceeded expectations, and advancements in US-Iran nuclear discussions could potentially lead to increased Iranian crude oil exports. Concurrently, data from the American Petroleum Institute (API) revealed a 2.4 million barrel increase in US crude inventories over the past week, contradicting predictions of a 1.68 million barrel decrease. Despite this, reductions at the Cushing storage hub and in fuel stockpiles somewhat mitigated the impact.