Saudi Arabian Oil Fell 1% on Concern Over U.S.-China Trade War
Saudi Arabian oil prices dropped more than 1% amid concerns over the prospects of a trade deal between the U.S. and China. Also, worries about oversupply weighed on the market.
Brent crude fell 69 cents, or 1.1%, at $61.82. The contract increased by 1.3% last week.
U.S. crude fell 63 cents, or 1.1%, lower at $56.61 a barrel, having climbed 1.9% last week.
U.S. President Donald Trump said that trade talks with China were moving along “very nicely.” Contrarily, the United States would only make a deal with Beijing if it were is for the good of America.
The 16-month trade war between the U.S. and China economies slowed economic growth across the globe. Also, it prompted analysts to lower reports for oil demand, creating concerns that an oversupply could happen in 2020.
Trump also said there had been false news about U.S. willingness to boost tariffs as part of a “phase one” agreement. Besides, report of which improved markets.
Emphasizing the impact of the trade war, data showed that China’s producer prices dropped the most in October. The manufacturing sector weakened, struck by the dispute, and decreasing demand.
An analyst at Phillip Futures said China delivered a big deflationary shock in its factories, providing a dull tone towards the weak state of the global economy.
Auto sales in China decreased for a 16th consecutive month in October. Also, the number of new energy vehicles sold contracting dropped for the fourth month in a row.
Shareholders are also concerned about glut supplies of crude oil, analysts said.
The oil market perspective for next year may have upside potential, according to OPEC. They suggested there is no need to cut production further.
Saudi Arabian Oil Prices Drop Amid Mixed Sino-U.S. Trade War
Oil prices decreased on Monday in Asia after U.S. President Trump said trade talks with China are going along “very nicely.” Contrarily, he denied forecasts from last week that the two sides agreed to roll back on some existing tariffs on each others’ goods.
U.S. Crude Oil WTI Futures dropped 0.9% to $56.71. International Brent Oil Futures also fell 0.9% to $61.91.
Oil prices increased by almost 10% amid reports at the time that suggested China and the U.S. were moving closer to a partial trade deal.
Also, weighing on the market data over the weekend showed that China’s producer prices decreased the most for more than three years in October.
Moreover, the OPEC+ partners agreed last year to cut production by 1.2 million bpd from January until March 2020 to boost oil prices.
Money managers increased their net long United States crude futures and options point in the week to Nov. 5 by 22,512 agreements to 138,389. The data is according to the U.S. Commodity Futures Trading Commission (CFTC).
In the United States, energy firms last week lowered the number of oil rigs operating for a third week in a row. Drillers drop seven rigs in the week to Nov. 8, bringing the total number to 684, the lowest since April 2017, Baker Hughes said.
