Oil falls as market eyes US-China trade talks, storage report mixed

Oil prices edged lower on Wednesday, after bouncing back from a sharp sell-off earlier in the week, as investors turned their focus to U.S.-China trade talks this weekend.

Brent crude futures were down 71 cents a barrel, or around 1.14%, at $61.44 a barrel by 12:00 p.m. ET (1600 GMT), while U.S. West Texas Intermediate crude was down 66 cents, or 1.12%, lower at $58.43 a barrel.

Both benchmarks plunged to four-year lows this week after OPEC+ decided to speed up output increases, stoking fears of oversupply at a time when U.S. tariffs have increased concerns about demand.

The U.S. and China are due to meet in Switzerland, which could be the first step toward resolving a trade war disrupting the global economy.

The U.S.-China trade talks come after weeks of escalating tensions that have seen duties on goods imports between the world's two largest economies soar well beyond 100%.

"While the meeting may signal a thaw, expectations for a breakthrough remain low," said Thiago Duarte, market analyst at Axi. "Unless the U.S. receives major trade concessions, further de-escalation seems unlikely," he said.

Investors also awaited the upcoming Fed update on Wednesday. They expect the policy rate to remain in the 4.25%-4.50% range until the Fed's July 29-30 meeting.