Oil prices rose in highly volatile trade on Tuesday in the wake of expectations of a drawdown in the United States (U.S.) crude inventories.
But gains were capped by concerns about a recession and uncertainty over a China-U.S. trade deal.
Brent crude was up 30 cents a barrel at $59. The global benchmark hit a session high of $59.44 and a low of $58.80 during the volatile session.
The amount is slightly below the $60 used by the Federal Government as benchmark for this year’s Appropriation Act.
U.S. West Texas Intermediate crude was up 73 cents at $54.37 a barrel after briefly rising more than $1 a barrel.
“We could have another one of these blockbuster (U.S. oil inventory) draw-downs – that’s supportive,” said John Kilduff, a partner at Again Capital Management in New York.
U.S. crude oil inventories were forecast to have fallen by over two million barrels last week, a Reuters poll showed, ahead of industry data.
The expected draw in inventories amid strong refining runs lent strength to crude prices, said Bob Yawger, Director of Energy futures at Mizuho in New York.
During the session, the oil market oscillated in response to swings on Wall Street, which was hurt by a fall in financial stocks, while revived worries about a U.S. recession overshadowed early optimism of a resolution to the prolonged trade dispute between the world’s two largest economies.
U.S. President Donald Trump said on Tuesday that he believed China was sincere about wanting to reach a deal, while Chinese Vice Premier Liu He said China was willing to resolve the dispute through “calm” negotiations.