U.S. President Donald Trump said on Wednesday a trade deal with Chinese President Xi Jinping was possible this weekend but he is prepared to impose U.S. tariffs on most remaining Chinese imports if the two countries don’t agree.
“It’s all about the G20,” said Craig Erlam, analyst at OANDA. “It’s clear that investors are a little cautious when it comes to this meeting, given how talks collapsed previously and the fighting talk we’ve since seen from both sides.”
On Wednesday, oil jumped more than 2% after the latest U.S. petroleum supply report showed a larger-than-expected drop in crude stocks. Inventories fell 12.8 million barrels, exceeding the 2.5 million barrel drop analysts had expected.
“Despite these stunning numbers there are still many doom-and-gloom people that are down on the economy. That is why the oil market will take its cue from G20 headlines,” Phil Flynn, an analyst at Price Futures Group in Chicago, said in a note.
Traders said follow-through buying was being crimped by uncertainty over whether there will be a trade breakthrough at the G20 that can boost oil demand, and by questions about continued output cuts by OPEC and its allies.