U.S. Oil Fell as Concerns over U.S.-China Talks Drag On
The U.S. oil prices slipped for the second straight day amid market anxiety over limited progress between China and U.S on declining trade tariffs. Also, expectations of an increase in U.S. inventories made noise.
West Texas Intermediate crude fell 32 cents or 0.56 to $56.73 a barrel. It slipped away from an eight-week peak hit when expectations for the trade deal surged.
Brent crude futures settled down 26 cents, or 0.42%, at $62.18 a barrel.
A Chinese government source said there was anguish in Beijing about prospects for a trade agreement. Chinese officials are worried by U.S. President Trump’s comment that there was no deal on phasing out tariffs.
Chief market strategist at CMC Markets said there are reports that the mood in Beijing was cynical. Also, the lack of announcement concerns for the demand vision is making the market nervous about trade talks.
The recurring trade battle between the United States and China imposes tit-for-tat tariffs on each other strike global growth prospects. Also, it clouded the vision for future oil demand. Meanwhile, a poll showed U.S. crude oil stockpile is about to increase for a fourth straight week also gripped prices.
Today, the American Petroleum Institute scheduled to release its data for the latest week. Also, the Energy Information Administration’s official weekly report is due on Wednesday.
Senior market analyst at OANDA said if they get further strong signs of global growth improvement or an extension in output cuts by OPEC+, WTI will struggle to attempt the $60-a-barrel mark.
One possible factor upholding prices going forward was a revival in geopolitical tensions. Also, in Dubai, armed members of Yemen’s Iran-aligned Houthi rally seized a vessel dragging a South Korean rig at the southern end of the Red Sea.
U.S. Oil Prices Amid U.S.-China Trade Jitters
The U.S. oil prices dropped in Asia amid more U.S.-China trade anxiety.
CNBC cited the Chinese government source said that Beijing is not positive about prospects for a trade agreement.
The U.S. Crude oil WTI Futures fell 0.2% to $57.03. Also, International Brent Oil Futures dropped 0.1% to $62.36.
Despite the decrease, WTI is still up 25% on the year and Brent nearly 16%.
Looking ahead, traders are also paying close attention to the upcoming Dec. 5-6 OPEC+ meeting.
A based oil risk consultant PetroMatrix said nothing has been changing on the deal, although the OPEC meeting is two weeks away.
Moreover, at current prices and the upcoming Saudi Aramco IPO, there is nothing to expect from the OPEC meeting. The latest updates from the organization and the IEA still point to a global petroleum stock-build in 2020.
OPEC+ agreed in December 2018 to slash supply by 1.2 million barrels per day. As that deal comes up for review in the next three weeks, members of the cartel have already been producing noise that it might not want to deepen slash.
Also, traders await weekly crude inventories reports from the United States, EIA, and the API this week. The data are due to report on Wednesday and Thursday, respectively.
