Oil is on track for a weekly gain, buoyed by signs of a cooling in trade tensions between the U.S. and China and after official data showed a draw down in U.S. crude inventories.

Futures in New York were up 0.1%, after falling 0.6% on Thursday. The U.S. benchmark is up about 1% over the week. Investors are balancing fears about slowing global economies and demand with anticipation the Federal Reserve Chair Jerome Powell will signal a rate cut is coming during a speech Friday at a Wyoming conference. Meanwhile, U.S. President Donald Trump said Thursday he would “probably” make a deal with China on trade, after a move to delay sanctions against Huawei Technologies Co. earlier in the week offered a hint of progress.

U.S. crude inventories fell by a bigger-than-forecast 2.73 million barrels last week, according to government data, although a 2.61 million-barrel increase in stored supplies of diesel and other distillates, muddied the outlook for demand.

West Texas Intermediate crude for October delivery was up 5 cents at $55.40 a barrel on the New York Mercantile Exchange as at 8:35 a.m. Sydney time. October WTI settled down 33 cents to end at $55.35 a barrel on Thursday.

Brent for October settled down 38 cents to $59.92 on the ICE Futures Europe Exchange.

Source : Bloomberg