Oil prices retained the majority of their gains from the prior session during early trading on Thursday, as investors looked ahead to U.S.-China trade discussions scheduled for later in the day, anticipating indications that the tensions impacting the economic growth outlook may begin to alleviate. Brent crude futures experienced a decline of 3 cents, translating to a decrease of 0.05%, settling at $64.89 a barrel by 0032. In parallel, U.S. West Texas Intermediate crude futures decreased by 11 cents, or 0.18%, reaching $60.37.

U.S. President Donald Trump is scheduled to meet with Chinese President Xi Jinping on Thursday in Busan, South Korea, during the Asia-Pacific Economic Cooperation summit. Markets anticipate a consensus that may alleviate trade tensions, which have adversely impacted the projections for global growth and fuel demand. On Wednesday, Trump indicated his expectation to lower U.S. tariffs on Chinese imports, contingent upon Beijing’s agreement to limit the supply of precursor chemicals used in the production of fentanyl.

In a move that aligns with market expectations, the U.S. Federal Reserve has lowered interest rates on Wednesday, thereby enhancing the economic outlook. However, it indicated that this could be the final reduction of the year, as the persistent government shutdown poses a risk to data availability. “The Fed’s decision underscores a broader turn in its policy cycle – one that favors gradual reflation and support over restraint, providing a tailwind to commodities sensitive to economic activity,” Claudio Galimberti stated in a note.

Brent and WTI experienced increases of 52 cents and 33 cents, respectively, in the prior session, driven by optimism surrounding trade negotiations and a drawdown in U.S. crude and fuel inventories that exceeded expectations. Crude inventories experienced a decline of 6.86 million barrels, reaching a total of 416 million barrels for the week ending October 24, according to the EIA. This figure stands in contrast to analysts’ expectations, which anticipated a decrease of only 211,000 barrels.