Singapore — Crude oil futures were higher during mid-morning trade in Asia Wednesday, recovering from their overnight slump as markets now looked ahead for US inventory data to provide direction.
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At 10:20 am Singapore time (0220 GMT), front-month ICE Brent September futures rose 21 cents/b (0.33%) from Tuesday's settle at $64.56/b, while the NYMEX August light sweet crude futures contract was 4 cents/b (0.07%) higher at $57.66/b.
Oil futures lost close to $2/b during Tuesday's trading session after US Secretary of State Mike Pompeo on Tuesday said that Iran was prepared to negotiate with the US over its missile program, according to media reports.
US President Donald Trump underscored Pompeo's comments, saying progress has been made with Iran and that the US was not looking for a regime change in Tehran.
The comments appeared to markedly defuse a long-simmering standoff with Iran, but analysts indicated the downside market impact of the comments could be limited.
"Look to further pressure here that could build from the dissipation of geopolitical concerns and shift towards supply woes, though one should not rule out further jawboning to come from both the US and Iran in the duration," said Pan Jingyi, IG market strategist.
Prices in Asia this morning recovered as markets are now focused on US inventory data reports, amid renewed trade tensions between the US and China.
"Looking ahead, US inventories are expected to decline, and the extent of this decline will decide the price direction for this week," said ANZ analysts in a note Wednesday.
According to analysts' reports quoting data released by the American Petroleum Institute on Tuesday, US crude inventories for the week ended July 12 were down 1.4 million barrels.
Analysts surveyed Monday by S&P Global Platts were looking for a bigger draw of 4.2 million barrels in US crude stocks last week. Definitive numbers on last week's US crude inventory data is due for release from the US Energy Information Administration later Wednesday.
Investors would also be watching out for developments around the US-China trade dispute, with US President Donald Trump stating that additional tariffs could be levied on Chinese imports.
The US and China said that they were open to trade negotiations when the leaders of the two countries met in Japan for the G20 summit in June.
"Asian markets may trade with a softer tone today as investors contemplate the US threat of more Chinese tariffs again," said analysts from OCBC Bank in a note Wednesday.
As of 0220 GMT, the US Dollar Index was down 0.01% at 97.01.
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--Edited by Nurul Darni, email@example.com