(RTTNews) – Oil prices traded higher on Thursday after the International Energy Agency warned that global oil inventories are falling at a record pace and will continue to drop for months as a result of disruption to Middle East supplies.
Investors also await the outcome of U.S. President Donald Trump’s summit with Chinese President Xi Jinping in Beijing. The three-day state visit focusses on trade, tariffs, artificial intelligence, Iran war, Taiwan, rare earths, and supply chains.
Brent crude futures for July delivery were up 0.9 percent at $106.55 a barrel while WTI crude futures edged up by 0.7 percent to $101.72.
The spotlight was firmly on the high-stakes summit between Trump and Xi Jinping in Beijing. Based on Xi Jinping’s readout of the meeting, the two leaders agreed to develop a “constructive China-U.S. relationship of strategic stability” led by cooperation and “measured competition.” It remains to be seen if the U.S. will call on China to help with the ongoing conflict in Iran.
Meanwhile, the International Energy Agency has warned that the global oil market is likely to remain heavily undersupplied until October, bringing inflationary worries back into view.
In its monthly oil market report, the IEA flagged greater volatility ahead as peak summer demand approaches.
OPEC lowered its demand outlook for the year, citing the impact of the ongoing war in Iran, which has effectively closed the Strait of Hormuz.
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