Brent gains ahead of Trump-Jinping meeting
The front-month ICE Brent contract has increased by $0.48/bbl on the day, to trade at $64.53/bbl at 09.00 GMT.
IMAGE: Oil storage tanks. Getty Images
Upward pressure:
The oil market’s attention remains fixed on today’s highly anticipated meeting between US President Donald Trump and his Chinese counterpart, Xi Jinping.
Both leaders are scheduled to meet in Seoul, South Korea, to discuss ways to ease trade tensions and strengthen bilateral economic ties.
The oil market is “laser-focused” on a high-stakes summit between two leaders, “that is expected to result in a trade war détente,” VANDA Insights’ founder Vandana Hari commented.
Meanwhile, Brent crude’s price has moved higher after the US Energy Information Administration (EIA) reported a big draw in US crude stocks.
Commercial US crude oil inventories have declined by 6.9 million bbls to 416 million bbls for the week ending 24 October, according to data from the EIA.
“Lower imports were behind the inventory draw, with total crude imports falling 867k [867,000] b/d week-on-week to the lowest level since February 2021,” remarked two analysts from ING Bank.
A drop in US crude stocks typically indicates higher demand and can lend some support to Brent's price.
Downward pressure:
Fears of a supply glut have capped some of Brent’s price gains today, as market analysts expect the OPEC+ group of oil producers to continue ramping up production in December.
Earlier this week, a Bloomberg report suggested that the Saudi Arabia-led coalition may announce another monthly increase of 137,000 b/d for December.
Eight members of the group are scheduled to virtually meet on 2 November to decide on December production policy.
“The market will also be watching this weekend's OPEC+ meeting, where the group will likely announce another 137k b/d [137,000 b/d] supply hike for December,” ING Bank’s analysts added.
By Aparupa Mazumder
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