NEW YORK, May 7 — Oil prices steadied on Wednesday after bouncing back from a sharp sell-off earlier in the week as investors turned their focus to United States (US)-China trade talks this weekend.
Brent crude futures were down 11 cents a barrel, or around 0.18 per cent, at US$62.04 a barrel by 10.07am ET (1407 GMT), while U.S. West Texas Intermediate crude was also 11 cents, or 0.19 per cent, lower at US$58.98 a barrel.
The US and China are due to meet in Switzerland, which could be the first step toward resolving a trade war disrupting the global economy.
"It is clear that hopes are high with respect to trade talks," said SEB's chief commodities analyst Bjarne Schieldrop.
Both benchmarks plunged to four-year lows this week after OPEC+ decided to speed up output increases, stoking fears of oversupply at a time when US tariffs have increased concerns about demand.
Still, analysts say that some US producers have signalled that they would cut spending, cautioning that the country's oil output may have peaked, which is also contributing to the uptick in the market.
"It is also worth noting that the OPEC production increase at the weekend was fully priced in," said Saxo Bank analyst Ole Hansen.
The US-China trade talks come after weeks of escalating tensions that have seen duties on goods imports between the world's two largest economies soar well beyond 100 per cent.
Brokerage and consulting firm PVM's analyst Tamas Varga noted that volatility is expected to persist on quicker-than-expected OPEC+ supply, while US policymaking remains unpredictable.
He added that conflict in the Middle East between Israel and the Houthis increases the geopolitical risk premium.
US government data on stockpiles is due at 10.30am ET (1430 GMT). Analysts polled by Reuters expect, on average, an 800,000-barrel decline in U.S. crude oil stocks for last week.
Market sources, citing American Petroleum Institute figures on Tuesday, said crude stocks fell by 4.5 million barrels in the week ended May 2.
— Reuters
