Some of the previous session’s strong oil gains recorded have been erased on Thursday as oil prices fell, owing to traders’ waiting game on the anticipated G20 summit in Japan and a meeting of OPEC and other crude producers who are being expected to decide on an extension of output cuts.
According to reports by Reuters, Brent crude futures were down 42 cents, or 0.6 per cent, at 66.07 dollars by 0658 GMT.
U.S. West Texas Intermediate (WTI) crude futures were down 33 cents, or 0.6 per cent, at 59.05 dollars.
Oil prices rose more than 2 per cent on Wednesday to their highest in about a month, buoyed by U.S. government data showing a larger-than-expected draw-down in crude stocks as exports hit a record-high and surprise drops in refined product stockpiles.
However, traders said concerns that a hoped-for breakthrough on trade at the G20 may not eventuate and some nervousness about continued output cuts were crimping follow-through buying.
“Investors are split as what to expect from the G20, a positive reset to trade talks … could do wonders in the short-term for the demand-side argument for higher crude prices,” said Edward Moya, senior market analyst at OANDA.
U.S. President Donald Trump is expected to meet with Chinese President Xi Jinping at the Group of 20 summit that starts on Friday in Osaka, Japan to seek a breakthrough in negotiations to end a trade war that has been hitting global economic growth.
Trump said on Wednesday that a deal was possible but also spoke of a Plan B that would involve reducing business ties with China.
“With Trump stirring up trade war dust via “Plan B” there is still that element of the unknown,” Stephen Innes, managing partner at Vanguard Markets in Bangkok was reported to have said.