Oil futures saw small gains early Tuesday, building on a rally that took crude to a three-month high in the previous session in the wake of a “phase-one” U.S.-China trade deal.
West Texas Intermediate crude for January delivery CLF20, +0.28% on the New York Mercantile Exchange rose 17 cents, or 0.3%, to $60.38 a barrel, while February Brent crude BRNG20, +0.34%, the global benchmark, advanced 25 cents, or 0.4%, to $65.59 a barrel on ICE Europe.
“The oil market continues to be fairly well supported, with ICE Brent trading around the [$65-a-barrel] level, as broader sentiment remains positive with the phase one trade deal. Oil fundamentals also remain constructive, with global inventories declining,” said Warren Patterson, head of commodities strategy at ING, in a note, highlighting the rising premium held by the nearby Brent contract over later-dated contracts.
That said, expectations for a return to surplus in the first half of next year “is something the market will have to deal with,” he said, while weak refinery margins at the moment “raise questions about oil demand moving forward.”
The American Petroleum Institute is expected to release its weekly estimate of U.S. crude inventories late Tuesday, while the Energy Information Administration’s more closely followed data is due for release Wednesday morning. Analysts surveyed by S&P Global Platts on average, look for the EIA data to show a 2.5 million barrel fall in U.S. crude inventories last week, while gasoline stocks are forecast to show a rise of 2.4 million barrels and distillate stocks are expected to have increased by 600,000 barrels.
January natural-gas futures NGF20, -1.32% were off .15% at 2.305 per million British thermal units.