London — Oil rose on Wednesday after media reports that China was open to agreeing on a partial trade deal with the US, while Turkey’s military operation in northern Syria also supported prices as it could affect regional oil production.
Brent crude was up 97c at $59.21 a barrel by 1.26pm GMT, and US West Texas Intermediate (WTI) crude was at $53.57, up 94c.
Negotiators from the US and China, the world’s top two economies, will meet in Washington on Thursday in the latest effort to hammer out a deal aimed at ending a long-running trade dispute that has slowed global growth.
Tensions between the two sides rose this week as the US imposed visa restrictions on Chinese officials and placed leading Chinese companies on a blacklist.
China is still open to agreeing on a partial trade deal, Bloomberg reported on Wednesday, citing an official with direct knowledge of the talks.
The Financial Times also reported that China was offering to increase annual purchases of US agricultural products as part of efforts to secure an interim trade agreement with Washington.
“Crude oil has, just like other riskier assets, received a boost from news that China is open to accept a partial trade deal,” Saxo Bank commodity strategist Ole Hansen said. “This news comes on top of earlier reports that Turkish troops have moved into Iraq — something that could add to a growing list of geopolitical worries for the oil market.”
Turkey launched a military operation into Syria, President Tayyip Erdoğan said, adding that the offensive was aimed at eliminating a “terror corridor” along the Turkish border. Analysts say the attacks could affect the economy of the oil-producing Kurdistan region in Iraq, and energy prices.
Protests also threatened oil production in Ecuador and Iraq, members of oil cartel Opec.
Saudi Aramco CEO Amin Nasser said there was no doubt Iran was behind September’s attacks on Saudi oil facilities, and warned such strikes may continue if there is no concerted international response.
Commerzbank analyst Carsten Fritsch said if the US-China talks fail, “the oil price risks suffering a renewed slide because concerns about demand would then increase considerably again, especially looking ahead to the coming year”.
Oil will weaken in 2020 to about $50 a barrel due to slowing global demand, the heads of the world’s biggest trading houses, Vitol, Trafigura and Gunvor, told the annual Oil & Money 2019 conference in London.