Oil prices edged higher on Wednesday in Asia after the Organization of the Petroleum Exporting Countries (OPEC) agreed to extend output cuts.
U.S. Crude Oil WTI Futures were up 0.2% to $56.38 by 12:56 AM ET (04:56 GMT). International Brent Oil Futures also gained 0.2% to $62.55.
All OPEC and non-OPEC members including Russia voted unanimously to pass the nine-month extension of their agreement to cut production by 1.2 million barrels per day in the last day of meetings in Vienna on Tuesday.
The news provided some support to prices today but analysts at ING stressed that “the agreement for this extension was the bare minimum and it’s not enough. We need a deeper cut in order to lift prices.”
In other news, the American Petroleum Institute reported that U.S. crude inventories fell by 5 million barrels last week, more than the expected decrease of 3 million barrels.
On the Sino-U.S. trade front, U.S. President Donald Trump and his Chinese counterpart Xi Jinping agreed to restart talks and hold off new tariffs on each other’s goods.
A potential agreement appears to be some way off, however, as White House trader advisor Peter Navarro said trade talks “will take time.”
Kathy Lien, strategist at BK Asset Management, stressed that a truce was not the same as a trade deal.
“Until tariffs on China are reduced or eliminated, the world’s second-largest economy faces serious economic challenges,” she said.
