Oil slides after 5% jump on Wednesday

Oil prices slid and gave back some of their gains after jumping more than 5% on Wednesday amid optimism on Sino-U.S. trade talks.

U.S. Crude Oil WTI Futures traded 1.1% lower to $51.77 per barrel by 12:52 PM ET (05:52 GMT).

Brent Oil Futures, the U.K.-traded global crude benchmark, also declined 0.9% to $60.86.

WTI settled up 5.2% on Wednesday at $52.36, almost 24% above the 18-month lows of $42.36 hit on Christmas Eve. U.K. Brent also hit 2019 highs above $62 on Wednesday.

The rally came as China said trade talks with the U.S. were “extensive and detailed,” and that both sides agreed to continue to keep in close contact.

“Optimism on US-China trade talks is bolstering risk sentiment…the sharp rally in oil prices is also indicative of the fact that global growth fears were probably overdone,” said Michael McCarthy, chief markets strategist at CMC Markets.

Meanwhile, reports that <a href=’https://staging.theenergyyear.com/companies-institutions/opec/’>OPEC kingpin Saudi Arabia has vowed to “stabilise” the market also provided support for oil prices.

Saudi Energy Minister Khalid al-Falih said actions taken by the OPEC+ alliance were starting to bring the market back after a near -40% drop from 2018 highs.

Falih said the kingdom was pumping about 800,000 barrels less a day from the record high of 10.2 million barrels per day in November.

On the other hand, the U.S. Energy Information Administration said that crude inventories fell by 1.68 million barrels for the week ended Jan 4., about a third less than the 2.4 million-barrel draw forecasted by analysts.

The report was cited as a headwind for oil prices today.

On the products side, gasoline inventories rose by 8.07 million barrels, more than double the expected build of 3.39 million barrels. They were also 8% above the 5-year average, the EIA said.