Oil little changed as Trump heads to China

By Stephanie Kelly

LONDON, May 13 (Reuters) - Oil prices were small changed connected Wednesday arsenic investors monitored a fragile Middle East ceasefire and awaited a high-stakes acme successful Beijing betwixt U.S. President Donald Trump and China's ‌Xi Jinping.

Brent crude futures were up 23 cents, oregon 0.2%, to $108.00 a tube astatine 1043 GMT. U.S. West Texas ‌Intermediate futures were down 10 cents, oregon 0.1%, to $102.08.

Both benchmarks person hovered astir oregon supra $100 per tube since the U.S.-Israeli warfare connected Iran began astatine the ​end of February aft which Tehran efficaciously unopen the captious Strait of Hormuz.

"The marketplace remains highly reactive to each update from the region, meaning crisp swings are apt to persist. Any further escalation oregon nonstop menace to proviso flows could rapidly revive beardown upside momentum successful some Brent and WTI," said Priyanka Sachdeva, elder marketplace expert astatine Phillip Nova.

Supporting prices, the International Energy Agency said planetary lipid ‌supply would not conscionable full request this ⁠year arsenic the warfare wreaks havoc connected Middle Eastern production.

"The latest IEA lipid marketplace study conscionable showed the magnitude of the disruption with ample lipid inventory declines implicit the past 2 months," UBS ⁠analyst Giovanni Staunovo said.

The IEA besides said Russia's crude lipid accumulation declined by 460,000 barrels per time successful April from a twelvemonth earlier to astir 8.8 cardinal bpd, arsenic Ukraine ramped up drone attacks connected vigor targets.

TRUMP SAYS HE DOES NOT NEED CHINA'S HELP TO END WAR

On ​Tuesday, ​oil prices roseate much than 3% arsenic hopes for a lasting U.S.-Iran ​ceasefire faded, dimming prospects for reopening the strait, ‌through which astir a 5th of planetary lipid and liquefied earthy state usually flows.

Trump said connected Tuesday helium did not deliberation helium would request China's assistance to extremity the war, adjacent arsenic prospects for a lasting bid woody weakened and Tehran tightened its grip implicit the strait.

China is the biggest purchaser of Iranian lipid contempt sanctions unit from the Trump administration. Trump is scheduled to conscionable Xi connected Thursday and Friday.

"The magnitude of the disruption and the standard of the proviso nonaccomplishment - already much than ‌1 cardinal barrels - means lipid prices are apt to stay supra $80 per ​barrel for the remainder of the year," Eurasia Group said successful a ​client note.

The warfare has begun to measurement connected the ​U.S. economy, with higher lipid prices pushing up substance costs and economists expecting to spot second-round effects ‌in the months ahead.

In April, U.S. user prices roseate ​sharply for a 2nd consecutive ​month, producing the largest yearly summation successful ostentation successful astir 3 years and reinforcing expectations the Federal Reserve volition support involvement rates dependable for a while.