Oil steadied after Wednesday’s rally amid concern that political tensions between the U.S. and China pose another hurdle to a trade deal that could lift the global demand outlook.

Futures for January delivery traded near $57 a barrel in New York. While China’s Vice Premier Liu He said he was “cautiously optimistic” about reaching an initial trade agreement, President Donald Trump is expected to sign a bill supporting protesters in Hong Kong, potentially complicating negotiations. Crude rose 3.4% on Wednesday as U.S. crude inventories at Cushing fell 2.3 million barrels last week, the most since August.

Oil is down about 14% from a peak reached in April as the on-again, off-again trade talks between Beijing and Washington sap global demand and as forecasters predict a new tide of American production in 2020. That’s overshadowing the resurgent risk to supply from the outbreak of protests in Iraq and Iran, two of the Middle East’s five biggest producers.

“After the euphoria of yesterday’s rally on favorable U.S. oil statistics, the market woke up today to face the broader, bearish challenges ahead,” said Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA. “It still faces a weakening economy, and growing shale-oil supply from the U.S.”

West Texas Intermediate for January delivery lost 9 cents to $56.92 a barrel on the New York Mercantile Exchange as of 10:55 a.m. London time. The December contract, which expired Wednesday, added $1.90 to close at $57.11.

Brent for January settlement fell 10 cents to $62.30 a barrel on the London-based ICE Futures Europe Exchange, after climbing $1.49 on Wednesday. The global benchmark crude traded at a $5.37 premium to WTI.

Crude inventories at Cushing, Oklahoma, fell for a second week to the lowest level in about a month. While nationwide stockpiles increased by 1.38 million barrels, it was less than the 1.5 million-barrel build estimated in a Bloomberg survey.