Investing.com - Oil prices traded higher on Thursday as China de-escalated trade tensions with Washington, confirming preparation talks for renewed trade negotiations and calming fears that the dispute would slow the world economy even further.
New York-traded West Texas Intermediate crude futures gained 42 cents, or 0.8%, to $56.20 a barrel by 7:34 AM ET (11:34 GMT), while Brent crude futures, the benchmark for oil prices outside the U.S., rose 6 cents, or 0.1%, to $59.99.
China’s Commerce Ministry confirmed overnight that Beijing and Washington were discussing the scheduling of face-to-face trade negotiations in September. Ministry spokesperson Gao Feng repeated the call to “create conditions” for progress, saying discussions should focus on removing new tariffs to prevent escalation and resolve issues calmly.
Even if the remarks provide no sign of imminent resolution, the suggestion of de-escalation brought a sigh of relief from financial markets.
Oil has been supported this week by strong compliance in the so-called OPEC+ pact on output restraint, a large draw in U.S. crude inventories and increasing tensions between Washington and Tehran. However, WTI is still down 15% from April highs. The ongoing trade conflict raises concerns that the negative economic impact will damage global demand for crude.
“Speculation about future demand weakness and impending recessions are keeping prices lower at the moment,” Ellen Wald, president of Transversal Consulting and Investing.com contributor, said.
But Wald noted that amid all the recent talk of pending recession, domestic oil data provided positive signals for the U.S. economy overall.
“It’s important to keep an eye on oil and other economic data to see whether this economic slowdown is really on the way or whether it's just the current market narrative being fueled by anxiety,” she said.
Against that backdrop, the U.S. will release its revised reading for economic growth in the second quarter as well as weekly jobless claims at 8:30 AM ET (12:30 GMT). Despite forecasts for a slightly lower revision to growth of 2.0%, the U.S. economy remains supported by strong domestic consumption, reflecting the still-unbroken health of the labor market.
In other energy trading, gasoline futures rose 0.6% to $1.5735 a gallon by 7:37 AM ET (11:37 GMT), while heating oil gained 0.5% to $1.8664 a gallon.
Lastly, natural gas futures traded up 0.6% to $2.235 per million British thermal unit.
-- Reuters contributed to this report.