Oil held near $57 a barrel as a report showed a hefty drop in U.S. crude inventories and as the resumption of face-to-face trade discussions between Washington and Beijing provided a glimmer of hope for demand.

Futures in New York were up 0.5% after rallying 2.7% over the previous three days. The American Petroleum Institute reported a 10.96 million barrel decline in stockpiles last week, according to people familiar with the data. That’s more than twice the drop forecast in a Bloomberg survey before official figures due Wednesday. U.S. Trade Representative Robert Lighthizer will travel to China Monday for the first high-level, face-to-face talks since May.

West Texas Intermediate for September delivery rose 27 cents, or 0.5%, to $57.04 a barrel on the New York Mercantile Exchange as of 7:41 a.m. local time after climbing as much as 50 cents earlier. It closed 1% higher on Tuesday.

Brent for September settlement advanced 17 cents to $64 a barrel on the ICE Futures Europe Exchange after settling 0.9% higher on Tuesday. The global benchmark crude is trading at a $6.97 a barrel premium to WTI. However, September Brent traded at a discount of 9 cents against October, compared with a premium of 66 cents last week, pointing to weakness in physical markets.

Source : Bloomberg