Oil Falls to Lowest in a Week After Surprise US Crude Build

Oil Falls to Lowest in a Week After Surprise US Crude Build

Brent crude LCOc1 fell 30 cents, or 0.5pc, to $61.29 a barrel by late afternoon in Europe.

U.S. -China trade talks are progressing well and the United States aims to sign an initial deal this month, top Trump administration officials said, offering reassurance to global markets after almost 16 months of tit-for-tat tariffs.

West Texas Intermediate crude for December delivery rose 22 cents, or 0.4%, to $54.40 a barrel on the New York Mercantile Exchange as of 10:55 a.m. London time.

-China trade deal suggested supply will continue to outpace demand.

The energy market strengthened after the U.S. Labor Department revealed a better-than-expected increase in hiring over October while new Chinese manufacturing orders expanded at its quickest pace in over six years.

Beijing's state-media Xinhua News Agency said the world's two largest economies had reached "consensus on principles" during a serious and constructive telephone call on Friday between their main trade negotiators.

-China trade talks added to a rise in USA oil inventories to weigh on prices.

"The turnaround today is attributed to job reports that came out and is triggering weekend recovery in the market", Gene McGillian, senior analyst and broker at Tradition Energy Group, told Bloomberg.

At 11:57 am EDT on Thursday, WTI Crude down 1.69 percent at United States $ 54.13 and Brent crude traded down 1.18 percent at $ 59.53.

The pipeline also flows to Cushing, where the outage is expected to drain inventories.

U.S. crude oil imports increased while exports decreased during the week ending October 25, the U.S. Energy Information Administration (EIA) said Wednesday. Still, prices for the week were dragged down by concerns of a slowing global economy, abundant USA crude stockpiles and trade talks.

Oil prices rose on Friday but remained on track for a weekly loss as a surprise bounce in Chinese manufacturing activity calmed investors' worries about progress in U.S. Crude supplies were forecast to increase by 2.5 million barrels, according to analysts polled by S&P Global Platts.

Another Reuters survey found output from OPEC members recovered in October from an eight-year low, with a rapid recovery in Saudi Arabia's production from September attacks on its oil infrastructure offsetting losses in Ecuador and voluntary curbs under an worldwide supply pact.

Rate cuts can often be bullish for oil prices because a stronger economy typically implies higher demand for crude.

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