Oil rises on supply concerns, China-US trade talks

Brent crude futures gained 94 cents, or 1.5 per cent, to $62.26 a barrel

Oil prices pushed higher for a second day on Wednesday, by more than 1%, buoyed by sanctions-related supply risk and hope of a China-US trade deal while investors also digested news of the U.S. seeking oil for delivery to its strategic reserves.

Brent crude futures gained 94 cents, or 1.5 per cent, to $62.26 a barrel as of 0400 GMT.

Oil has bounced off a five-month low that was hit on Monday as producers pumped more supply while trade tension blunted demand.

Supply risk arose from news overnight that a summit between Russian President Vladimir Putin and U.S. President Donald Trump was put on hold.

Despite the overall bearish sentiment driven by an oil supply glut and weak demand, the risk of supply disruption in hotspots like Russia, Venezuela, Colombia and the Middle East remains in place and prevents oil price staying below the $60 handle, said Mukesh Sahdev, founder and CEO of energy market consultancy XAnalysts.

Investors are also closely watching the progress of China-U.S. trade talks as officials from both countries are set to meet this week in Malaysia.

Trump said on Monday he expects to work out a fair trade deal with Chinese President Xi Jinping, whom he plans to meet in South Korea next week.

Trump’s trade negotiation comments are likely providing some support to the market. Further support is likely coming from the cancellation of the Trump-Putin summit, said ING commodities strategists on Wednesday.

US crude, gasoline and distillate stocks fell last week, market sources said, citing American Petroleum Institute figures on Tuesday.

Oil also found support on a U.S. plan to refill strategic reserves, ANZ research analysts said in a client note on Wednesday.