WASHINGTON, D.C. (DTN) -- New York Mercantile Exchange oil futures nearest delivery and Intercontinental Exchange Brent futures moved higher Wednesday morning, with the February West Texas Intermediate contract breaking through psychological resistance at $50 barrels (bbl) amid widespread market optimism following the conclusion of U.S./China trade talks.
Nymex February WTI futures extended the short-term uptrend for an eighth straight trading session, shifting $1.62 higher to $51.40 bbl, while ICE March Brent registered $1.67 advance to $60.39 bbl. Nymex February ULSD futures gained 3.0 cents to $1.8570 gallon and February RBOB futures rallied 4.38 cents to a $1.4064 gallon early Wednesday.
Oil futures were trading substantially higher midmorning Wednesday, as reports emerged that the first round of trade negotiations between the United States and China since the Dec. 1 meeting between U.S. President Donald Trump and Chinese President Xi Jinping have ended favorably.
The now concluded meeting in Beijing between midlevel trade representatives from both countries did not produce an official agreement, although the restart of negotiations is widely viewed by the markets as a major step towards addressing U.S. complaints over China's trade practices. China's foreign ministry confirmed earlier Wednesday morning that longer-than--expected negotiations suggest the two countries made serious progress in their trade discussions.
On Tuesday Trump tweeted, "Talks with China are going very well!" It was the first face-to-face meeting between U.S. and Chinese trade officials since Dec. 1 when Trump and Xi agreed to a 90-day truce in their trade dispute. Senior trade representatives are scheduled to meet later this month.
Oil futures were also lent an upside support from a sizable draw of 6.127 million bbl in commercial crude supplies during the first week of the year reported by American Petroleum Institute late afternoon Tuesday. API data details inventories in the Cushing, Oklahoma rose by 331,000 bbl. Last week, the API data reported a large draw of 4.5 million bbl, while Energy Information Agency reported inventories unchanged for the profiled week.
EIA's supply report will be released at 10:30 a.m. ET Wednesday, resuming its normal schedule after the holidays.
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