By Devika Krishna Kumar
NEW YORK (Reuters) - Oil rose about 1% on Tuesday as markets from stocks to bonds to commodities were supported by hopes that U.S. President Donald Trump may signal progress on trade talks with China.
Ahead of Trump's speech to discuss the country's trade policy at the Economic Club of New York at noon (1700 GMT), the benchmark Standard & Poor's 500 Index was trading in record territory, a fact the president often points to as a validation of his economic and trade policies. [MKTS/GLOB]
Concern about slower economic growth and oil demand due to the fallout from the 16-month U.S.-China trade dispute sent prices lower on Monday.
Brent crude, the global benchmark, was up 67 cents, or 1.1%, at $62.85 a barrel by 10:41 a.m. ET (1541 GMT), after falling as low as $61.90. West Texas Intermediate (WTI) crude rose 68 cents, or 1.2%, to $57.54.
"We continue to view U.S.-China trade negotiations as a key price influencer and since we don't expect any breakdown in talks anytime soon, we still see the energy complex slowly edging higher in maintaining an upward price channel that has been intact for more than a month," Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
The U.S. president said on Saturday that talks with China were moving along "very nicely" but the United States would make a deal only if it was the right one. He said there had been incorrect reporting about U.S. willingness to lift tariffs.
"He is widely expected to delay his decision to impose tariffs on European car and auto part imports and will also shed further light on the status of the trade negotiations with China," said Tamas Varga of oil broker PVM, referring to Trump's speech.
Adding further support, U.S. data showed that crude inventories at Cushing, the delivery point for WTI, fell by about 1.2 million barrels in the week to Nov. 8, traders said, citing market intelligence firm Genscape.
Inventories at the hub were expected to draw down after a more than 9,000-barrel leak forced the 590,000-barrel-per-day Keystone crude pipeline to be shut in late October. The line has since been restarted at reduced pressure.
Cushing inventories had grown for five weeks in a row through Nov. 1, according to government data.
Brent has risen 16% in 2019, supported by a supply-limiting pact by the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia. The producers meet on Dec. 5-6 to decide whether to extend the deal.
Oman, one of the outside producers working with OPEC, said on Monday that the alliance would probably extend the agreement but was unlikely to increase the size of the supply cut.
In a further supportive supply-side development, Goldman Sachs cut its 2020 forecast for growth in U.S. oil production, which has surged in recent years and helped keep a lid on prices.
(Additional reporting by Alex Lawler in London, Aaron Sheldrick; Editing by Dale Hudson, Louise Heavens and Alex Richardson)