Oil prices steadied on Thursday, holding most of the gains from the previous session as investors turned their attention to an anticipated meeting between the leaders of the United States and China.
Markets are hoping that the discussions could ease ongoing trade tensions that have clouded the outlook for global economic growth and fuel demand.
Crude Prices Edge Slightly Lower
By 00:32 GMT, Brent crude futures had slipped just 3 cents, or 0.05%, to $64.89 a barrel.
U.S. West Texas Intermediate (WTI) crude futures were down 11 cents, or 0.18%, at $60.37 a barrel.
Despite the small declines, both benchmarks remained near recent highs following a rally on Wednesday.
Trade Talks Bring Cautious Optimism
U.S. President Donald Trump and Chinese President Xi Jinping are set to meet in Busan, South Korea, during the Asia-Pacific Economic Cooperation (APEC) summit on Thursday.
Markets are watching closely for signals that both sides may agree to reduce tariffs and soften trade tensions that have weighed on economic sentiment worldwide.
Trump said on Wednesday that he expects to reduce some U.S. tariffs on Chinese goods in exchange for Beijing’s pledge to curb exports of precursor chemicals used to make fentanyl, a potent synthetic opioid.
Federal Reserve Decision Lifts Commodity Outlook
Adding to optimism, the U.S. Federal Reserve lowered interest rates on Wednesday, in line with market expectations.
However, policymakers signaled that it might be the final rate cut of the year as the government shutdown continues to disrupt data reporting.
“The Fed’s decision underscores a broader turn in its policy cycle — one that favors gradual reflation and support over restraint, providing a tailwind to commodities sensitive to economic activity,” said Rystad Energy chief economist Claudio Galimberti in a note.
U.S. Inventory Draw Supports Prices
Oil markets also drew strength from a sharper-than-expected drop in U.S. crude and fuel inventories.
According to the Energy Information Administration (EIA), crude stockpiles fell by 6.86 million barrels to 416 million barrels for the week ending October 24.
Analysts in a Reuters poll had expected only a modest 211,000-barrel decline.
Brent and WTI rose by 52 cents and 33 cents respectively in the previous session on the back of these bullish inventory figures and hopes for progress in U.S.-China negotiations.