On Tuesday, petroleum products’ prices curved in slightly. It was after the prior surge, as the pause of news on the U.S.-China trade front kept big moves in check.
Meanwhile, markets also prepared for weekly data on U.S. crude inventories.
New York-traded West Texas Intermediate crude futures plunged 9 cents, or 0.2%, to $56.05 a barrel. Brent crude futures, the benchmark for petroleum products price outside the U.S., also glided 5 cents, or 0.1%, to $59.69.
Monday’s jump in petroleum product price has been credited to a positive reading of growths between Washington and Beijing.
It happened after White House economic adviser Larry Kudlow outlined a timeline for further discussions.
In a note, a managing partner at VM Markets, Stephen Innes, said, “The U.S.-China trade spat has been at the center of the oil market demise, which has sent the global economy to the brink of recession and negatively impacted oil demand forecasts.”
In addition, “This current (oil) rally is shaping up to be more about optimism on U.S.-China trade than a heightened awareness of supply risks.”
Trade considerations aside, caution ruled ahead of weekly inventory data.
Issuance of Weekly U.S. Crude Report
The American Petroleum Institute will issue its weekly report on U.S. crude stockpiles amid prospects for a draw of 1.89 million barrels.
A market strategist at Oanda, Jeffrey Halley, said, “An unexpected rise could occur, possibly taking the wind out of oil’s sails, if only temporarily.”
Last week when official data from the Energy Information Administration showed an unexpected build, prices tumbled 3%.
In other energy trading, gasoline futures declined 0.2% to $1.6614 a gallon, while heating petroleum products advanced 0.2% to $1.8361 a gallon.
Lastly, natural gas futures dragged down 0.5% to $2.199 per million British thermal units.
Gold Prices Slump
Elsewhere, gold prices plunged on Tuesday in Asia. It was after traders awaited the approaching Jackson Hole Symposium in Wyoming and a speech by Federal Reserve Chairman Jerome Powell.
Gold Futures for December delivery traded on the Comex division of the New York Mercantile Exchange weakened 0.4% at $1,505.55.
The reduction came after U.S. Commerce Secretary Wilbur Ross confirmed overnight that Washington would prolong for another 90 days.
It is a license that permits China’s Huawei Technologies Co. to remain to do business with U.S. companies temporarily.
The news alleviated the trade tension between China and the U.S. It has sent stocks higher today while the safe-haven gold retreated.
The Fed’s yearly meeting with central bankers and policymakers from Thursday through Saturday is likely to be in focus.
The meeting would provide fresh clues on when the next U.S. rate cut is.
On Wednesday, the Fed will publish the minutes of its July 30-31 meeting, ahead of the Wyoming affair. Powell’s speech on Friday will also be a highlight for this week.
July records will be reported by the European Central Bank on Thursday, a day after the Fed’s.
In a note, a senior commodity analyst, Barani Krishnan indicated that there is a slowdown in gold’s recent rally.
It also said investors were anticipating more signs of central bank easing, potentially from the Jackson Hole event, before obliging to new long positions.