Oil prices fell on Thursday, despite US President Donald Trump's statement about lowering tariffs for China after meeting with Chinese President Xi Jinping in South Korea, amid skepticism that this marks the end of the trade war, UNN reports with reference to Reuters.
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Brent crude futures, which rose by 52 cents on Wednesday, fell by 20 cents, or 0.31%, to $64.72 per barrel by 06:42 GMT (08:42 Kyiv time). West Texas Intermediate crude futures also fell by 20 cents, or 0.33%, to $60.28 after rising by 33 cents a day earlier.
Trump agreed to lower tariffs for China from 57% to 47% as part of a one-year agreement in exchange for Beijing resuming soybean purchases from the US, maintaining rare earth exports, and stopping illegal fentanyl trade.
"Now the market sees the situation for what it is, without all this hype and political showmanship," said Vandana Hari, founder of Vanda Insights, an analytical company that provides oil market analysis.
"This is just a pause in the struggle and a small de-escalation that was presented as a 'trade agreement,'" she noted.
Also, contributing to improved economic prospects, the US Federal Reserve cut interest rates on Wednesday, in line with market expectations. However, it made it clear that this could be the last cut this year, as the ongoing US government shutdown jeopardizes data availability.
"The Fed's decision underscores a broader shift in its policy cycle – a move towards gradual reflation and support rather than restraint, creating favorable conditions for commodities sensitive to economic activity," said Claudio Galimberti, Rystad Energy's senior vice president of analysis, in a note.
The rise in Brent and WTI oil prices in the previous session also reflected a larger-than-expected reduction in US oil and fuel inventories.
"Both benchmark grades are likely to fall by more than 3% in October, which will be their third consecutive month of decline," the publication writes.
The Energy Information Administration reported that US oil inventories decreased.
Another important event for investors is the OPEC+ meeting scheduled for November 2, where the alliance is likely to announce an increase in supplies of 137,000 barrels per day in December.
The group has raised its overall production targets by more than 2.7 million barrels per day, representing about 2.5% of global supply, as part of a series of monthly increases since April. This is slightly less than half of the cumulative supply cut of 5.85 million barrels per day that the group agreed to in previous years.