Brent rises on China trade deal hopes, U.S. Gulf output cut

Brent crude oil prices gained on Wednesday after U.S. producers shut most of the offshore production in the Gulf of Mexico and U.S.-China trade talks reported progress.

Still, gains were capped due to coronavirus worries after Europe and Asia reported COVID-19 reinfections. 

Brent crude oil futures rose 0.3%, or 12 cents, at $45.98 per barrel. U.S. West Texas Intermediate steadied at $43.35 per barrel. Both benchmarks hit five-month highs on Tuesday.

Oil producers evacuated 310 offshore facilities and closed 1.56 million bpd of crude production in the Gulf of Mexico. This accounted for 84% of the region’s offshore production, almost as much as the outage caused by Hurricane Katrina 15 years ago.

Meanwhile, top U.S. and Chinese officials reaffirmed their commitment to a Phase 1 trade deal.

Also supporting oil prices was the bigger-than-expected decline in U.S crude oil inventories last week. Still, prices were under pressure after U.S. consumer confidence dropped to its lowest level in over six years.