Oil prices faded on Wednesday on concerns that the U.S./China Phase One trade deal may not provide much of a demand boost because the United States intends to keep tariffs on Chinese goods until a second phase deal.
Prices were also under pressure from a report by the Organization of the Petroleum Exporting Countries (OPEC) saying the producer group expected lower demand for its oil in 2020 even as global demand rises, as rival producers grab market share and the United States looks set for another output record.
Wednesday, approaching noon EST and shortly before the trade deal with China was to be signed, Brent crude fell 70 cents, or 1%, to trade at $63.79 U.S. per barrel, while U.S. West Texas Intermediate slid 1.2%, or 69 cents, to $57.54.
Data supplied Wednesday by the U.S. Energy Information Administration revealed that, for the week ending Jan. 10 U.S. inventories fell by 2.5 million barrels.
U.S. Treasury Secretary Steven Mnuchin said late on Tuesday that tariffs on Chinese goods will remain in place until the completion of a second phase of a U.S.-China trade agreement even though both sides are expected to sign an interim deal later on Wednesday.
The agreement is expected to include provisions for China to buy up to $50 billion more in U.S. energy supplies.
U.S. crude inventories rose by 1.1 million barrels, data from the American Petroleum Institute showed Tuesday, countering expectations for a draw.
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