(Bloomberg) -- Oil fell after a report that the biggest producers in OPEC+ aren’t pushing for deeper oil-supply cuts when the group meets next month.
Futures in New York slid 1.5% Wednesday. Prices dropped further after Reuters reported that a meeting between Chinese President Xi Jinping and U.S. President Donald Trump could be delayed until December.
The narrative around the OPEC cuts is changing, said Rob Thummel, managing director and portfolio manager at Tortoise, a Kansas firm that oversees more than $21 billion in assets. “If that’s the case, along with the higher than expected build in oil, oil prices should continue to fall for the day.”
U.S. crude inventories built by 7.93 million barrels last week, according to data from the Energy Information Administration. Gasoline and distillate supplies fell, while stockpiles stored at the Cushing, Oklahoma, storage hub rose 1.7 million barrels. The U.S. registered its first petroleum trade surplus in over four decades in September as production surged to a record.
Oil gained earlier this week on optimism that trade tensions between the U.S. and China are easing, potentially alleviating downward pressure on the global economy. Yet prices remain about 15% below the peak reached in April amid concern that tepid consumption growth and record American shale-oil output will create a new surplus next year.
West Texas Intermediate for December delivery fell 88 cents to settle at $56.35 a barrel on the New York Mercantile Exchange.
Brent for January settlement declined $1.22 to end the session at $61.74 a barrel on the ICE (NYSE:ICE) Futures Europe Exchange. The global benchmark crude traded at a $5.36 premium to WTI for the same month.
U.S. locations for a Trump-Xi meeting that had been proposed by the White House, including Iowa and Alaska, have been ruled out, a person familiar with the matter said. Locations in Asia and Europe are now being considered instead, the person said, asking not to be identified because the discussions aren’t public.
“The crude market is much more skeptical about a deal,” said John Kilduff, partner at Again Capital in New York. With further issues between a U.S.-China trade deal, oil prices are not going to rise now, he said. “It’s tough to surmount.”