Crude oil futures ended lower on Tuesday as fading optimism about U.S.-China trade talks weighed on prospects for near term energy demand.
Traders were also awaiting weekly crude inventories data from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA) for directional clues.
While the API will release its weekly oil report later today, the EIA’s data will be out on Wednesday morning.
Data showing an unexpected fall in U.S. producer prices in September due to lower costs of goods and services weighed as well on crude oil prices.
West Texas Intermediate Crude oil futures for November ended down $0.12, or about 0.2%, at $52.63 a barrel.
On Monday, WTI Crude oil futures for November ended down $0.06 at $52.75 a barrel, after having surged to $54.06 earlier in the day.
Prospects for progress in U.S.-China trade talks dimmed after U.S. President Donald Trump said a quick deal was unlikely.
However, White House economic adviser Larry Kudlow said he is hopeful about the trade talks with China, saying that the delegates are starting with a “clean slate, reopening the door.”
“And as you know, Thursday and Friday, the principals’ levels will be meeting and we are waiting for the Chinese offer. We are open, open to almost anything right now.”
Meanwhile, the South China Morning Post said Chinese Vice Premier Liu He is leading China’s delegation to Washington but will not carry the title of “special envoy” for President Xi Jinping, an early indication that Liu has not been given any particular instructions from China’s leader.
A source briefed on preparations for the trade talks also told the SCMP that the Chinese delegation may cut short their stay in Washington.
News that the U.S. has expanded its trade blacklist to include some of China’s top artificial intelligence firms may also cast a shadow over the talks. Additionally, a Bloomberg report said the White House is discussing blocking government pension funds from investing in China.
The U.S. Department of Commerce has blacklisted 28 Chinese organizations that are accused of violating human rights and committing abuses, targeting Uighurs and other mostly Muslim minorities in the Xinjiang Uighur Autonomous Region.
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