Asia Pacific Oil Prices Fall as Trade Talk Optimism Diminished
Asia Pacific oil prices were down on Wednesday amid demand concerns as China-U.S. trade talk optimism diminished.
U.S. Crude Oil WTI Futures lost 0.6% to $56.95 while international Brent Oil Futures declined 0.7% to $62.63.
After U.S. President Donald Trump struck a combative tone against China in his address to the U.N. assembly in New York, the fall in oil prices came.
The president said that not only has China declined to adopt promised reforms, but it has also embraced an economic model dependent on massive market barriers. Additionally, the dense state subsidies, product dumping, currency manipulation, technology transfers, and the theft of intellectual property.
Furthermore, the president also said in U.S.-China trade negotiations; he would not accept a “bad deal.”
In October, the two sides are planning to prepare for trade negotiations.
The U.S. is the largest consumer of oil, while China is the world’s largest oil importer and second-largest crude user.
Iranian President Hassan Rouhani said he was willing to discuss small changes, additions or amendments to a nuclear deal. As a result of sanctions taken away on weighing oil prices today.
The 2016 nuclear pact that Tehran had agreed with the U.S. and other foreign powers is what Rouhani was referring to. Calling the initiative by his predecessor Barack Obama, “the worst deal ever” Trump tore up that agreement last year, and reimposed sanctions on Tehran.
Trump said that no responsible government should subsidize Iran’s bloodlust, referring to the constant “Death to America” chants by the Islamic Republic.
Moreover, the president said that as long as Iran’s menacing behavior continues, sanctions will not boost. Also, he reinstated a U.S. oil embargo on Iran last November.
Oil Extends Losses after Trump Declined Trade Talk Optimism
Oil prices fell for a second day on worries that fuel demand could fall after U.S. President Donald Trump doused recent optimism over China-U.S. trade talks.
U.S. West Texas Intermediate crude (CLc1) dropped to $56.94, down 35 cents, while Brent crude futures (LCOc1) fell 47 cents to $62.63 a barrel
Ever since the attack on Saudi Arabian oil facilities on September 14, both benchmarks have fallen to their lowest level.
Jeffrey Halley, the senior market analyst for the Asia Pacific at OANDA, said that Donald Trump’s comments on trade last is what pulled the rug from underneath oil. Additionally, Trump was still maintaining quite a belligerent position.
Following a crippling attack on Saudi Arabia’s oil installations that have disrupted supplies from the world’s top exporter, oil rallied last week. Saudi Aramco is buying oil from other Middle East producers to meet its supply obligations to Saudi refineries overseas.
Howie Lee said the market is very concerned about the demand side of the equation. Contrarily, he would caution being complacent about the issue in the Middle East.
In addition to that, Lee also said that Saudi’s crude oil stockpiles could run out within two months. And that could prompt buyers to look for supplies in the spot market and push prices higher again.
Soon, official government data from the U.S. Energy Information Administration will be released.
