Oil prices edged higher on Friday, with crude benchmarks poised for multi-week gains amid a sharp drawdown in U.S. crude inventories, while trade tensions eased after Washington and Beijing agreed to hold high-level talks next month.
Brent crude was up 3 cents at $60.98 a barrel, as of 0144 GMT, while U.S. West Texas Intermediate (WTI) crude was up 8 cents at $56.38.
Brent is set to mark its fourth weekly gain, while U.S. crude is headed for a second weekly rise.
“Crude has been trading higher after the news that China and the United States would restart their trade talks with an important meeting in October,” said Alfonso Esparza, market analyst at OANDA.
Beijing and Washington on Thursday agreed to hold high-level talks in early October in Washington, cheering investors hoping that the trade war may end tit-for-tat tariff hikes that are chipping away at economic growth.
The prolonged trade dispute has been a dampener on oil prices, but Brent is still up about 13% this year, helped by production cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, to drain inventories.
U.S. crude and product inventories fell last week, with crude drawing down for a third consecutive week despite a jump in imports, the Energy Information Administration (EIA) said.
Crude stocks dropped 4.8 million barrels, nearly double analysts’ expectations, to 423 million barrels, their lowest since October 2018.
Oil prices on Thursday soared more than 2% after the EIA report, although they gradually trimmed gains as investors are not entirely convinced that the Sino-U.S. trade talks will yield results.