Oil prices rose on Wednesday, tracking gains inequities, as investors pinned hopes on a potential Brexit deal between Britain and the European Union and on signals from OPEC and its allies that further supply curbs could be possible.
But gains were limited due to lingering concerns of a global economic slowdown.
Global benchmark Brent crude oil futures LCOc1 had risen 25 cents to 58.99 dollars by 0621 GMT, up about 0.4 per cent from the previous day’s close.
U.S. West Texas Intermediate (WTI) crude CLc1 gained 23 cents or 0.4 per cent to 53.04 dollars a barrel.
“Oil is starting to see some bullish positions added on the easing of two big tail risks for global demand, the U.S.-China trade war and Brexit,” said Edward Moya, a senior market analyst at OANDA in New York.
“While a broader trade deal seems unlikely in the immediate future, the risks for the U.S.-China trade war have been fading.”
Last-ditch talks between Britain and the European Union to get a Brexit deal ahead of a summit of the bloc’s leaders this week ran past midnight to Wednesday, but it was still unclear if Britain could avoid postponing its departure, due on Oct. 31.
Analysts have said any agreement that avoids a “hard” or no-deal Brexit should boost economic growth and in turn oil demand and prices.
Providing more support, OPEC Secretary-General Mohammad Barkindo said the Organization of the Petroleum Exporting Countries “will do whatever (is) in its power” along with its allied producers to sustain oil market stability beyond 2020.
OPEC, Russia and other producers have cut oil output by 1.2 million barrels per day to support the market.
Yet an expected rise in U.S. crude inventories this week kept prices under pressure.
U.S. crude stocks probably grew for the fifth straight week, a preliminary Reuters poll showed.
U.S. oil inventory reports are due out from industry group the American Petroleum Institute on Wednesday and the U.S. Energy Information Administration on Thursday.
The reports have been delayed one day because of a U.S. government holiday.
“Should EIA inventories illustrate for a fifth consecutive week build, we expect for strong selling pressure to afflict oil prices on an intraday basis,” Benjamin Lu from Phillip Futures said in a note.
Concerns of a global economic slowdown due to the protracted trade war between the United States and China and swelling U.S. inventories also pressured prices.
The U.S.-China trade war will cut 2019 global growth to its slowest pace since the 2008-2009 financial crisis, the International Monetary Fund warned on Tuesday.