(Bloomberg) -- Oil extended declines on signs the U.S. and China still have some work to do to finalize a limited trade deal and as analysts forecast a fifth weekly increase in American crude stockpiles.

Futures in New York fell as much as 0.6% after dropping 2% on Monday. Beijing said it wants to hold more talks this month to hammer out details of the “phase one” trade agreement touted by President Donald Trump. U.S. inventories rose by 3.1 million barrels last week, according to the median estimate in a Bloomberg survey, before the official data due Wednesday.

Even if the U.S. and China manage to agree on the partial deal, it’s unlikely to have a major impact on slowing economic growth as existing tariffs won’t be rolled back. The International Energy Agency last week trimmed forecasts for oil consumption for this year and next amid the deteriorating economic backdrop. Meanwhile, on the supply front, Saudi Aramco said it’s now pumping as much oil as before the attacks last month.

“The noise around the phase one deal, in U.S.-China trade negotiations, reinforces the fact that the outcome is probably the most significant near-term factor,” said Stephen Innes, Asia-Pacific market strategist at AxiTrader Ltd. Even a limited agreement could alleviate demand concerns, he said.

West Texas Intermediate for November delivery fell 28 cents, or 0.5%, to $53.31 a barrel on the New York Mercantile Exchange as of 11:02 a.m. in Singapore. It dropped $1.11 on Monday, wiping out most of Friday’s $1.15 increase.

Brent crude for December settlement declined 34 cents, or 0.6%, to $59.01 a barrel on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a premium of $5.64 a barrel to WTI for the same month.

Beijing may send a delegation led by its top trade negotiator to finalize a written deal that could be signed by the Chinese and U.S. leaders at the Asia-Pacific Economic Cooperation summit next month in Chile, according to people familiar with the matter. China also wants the White House to scrap a planned tariff hike in December, something the administration hasn’t yet endorsed, another person said.

American crude stockpiles rose by 9.5 million barrels over the four weeks through Oct. 4, according to Energy Information Administration data. If they expanded again last week, that would be the longest run of gains since February.

--With assistance from James Thornhill and Dan Murtaugh.

To contact the reporter on this story: Elizabeth Low in Singapore at elow39@bloomberg.net

To contact the editors responsible for this story: Serene Cheong at scheong20@bloomberg.net, Andrew Janes, Dan Murtaugh

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