Oil pares losses on easing trade tensions, firmer U.S. equities
By Collin Eaton HOUSTON (Reuters) - Oil prices were steady on Tuesday, paring earlier losses as investors focused on signs that U.S.-China trade tensions could ease next month. The United States and China were continuing to work on an interim trade agreement, but it may not be completed in time for U.S. and Chinese leaders to sign it in Chile next month, a U.S.
By Collin Eaton
HOUSTON (Reuters) - Oil prices were steady on Tuesday, paring earlier losses as investors focused on signs that U.S.-China trade tensions could ease next month.
The United States and China were continuing to work on an interim trade agreement, but it may not be completed in time for U.S. and Chinese leaders to sign it in Chile next month, a U.S. administration official said.
The clarification of previous White House statements, that U.S. President Donald Trump and Chinese President Xi Jinping were expected to sign "phase one" of the trade deal, stymied oil market optimism that had reversed earlier losses and lifted U.S. equities.
But signs of tension between the United States and China after a nearly 16-month trade war are still fluid and have had an outsized impact on crude prices. Market participants believe the trade war has spooked investors and slowed global economic growth, crimping oil demand.
"After equities went green, crude oil found a bid and has rallied from the lows," said Robert Yawger, director of energy futures at Mizuho.
Oil prices "have been supported by the earnings season on Wall Street and the expectation that the U.S. and China will sign a preliminary, phase-one trade deal," said Andy Lipow, president of Lipow Oil Associates in Houston.
Graphic: U.S. crude inventories, weekly changes since 2017 - https://fingfx.thomsonreuters.com/gfx/editorcharts/US-OIL-STOCKS/0H001PBQX5Y0/eikon.png
Earlier in the sessions, prices fell on forecasts that U.S. crude inventories rose around 700,000 barrels last week. The first of the weekly supply reports is due at 2030 GMT from the American Petroleum Institute (API).
Russia's deputy energy minister said it was too early to talk of deeper output cuts by OPEC and its allies, adding to the pressure.
(Additional reporting by Alex Lawler and Aaron Sheldrick; Editing by Marguerita Choy and Dale Hudson)
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