Oil prices have slipped as investors are seeking clarity beyond the initial impact of the US-China trade agreement which is expected to increase flows between the two countries.
Brent crude oil futures dipped $0.10 at $65.12 a barrel while West Texas Intermediate (WTI) crude edged down $0.10 to $59.97 a barrel, reported Reuters.
The world’s two biggest economies, the US and China, announced a phase one deal which will see reduction in US tariffs, cooling long-delayed trade tensions. In return, officials in the US said it would result in a big rise in Chinese purchases of US-based farm products and other goods.
CMC Markets chief market strategist Michael McCarthy was quoted by Reuters as saying: “It seems the market has now fully priced (in) the phase one trade agreement, so we are going to need further news if we are going to push through the important (technical) resistance that is just ahead.”
The deal prevented additional taxes on Chinese goods worth $160bn that the US was set to impose, but investors remained careful as they awaited clear details on how the interim trade deal would work.
US Trade Representative Robert Lighthizer said that the agreement would almost double the country’s exports to China over the next couple of years. All the additional tariffs on some US goods which were supposed to be implemented on 15 December were suspended by State Council’s customs tariff commission of China.
ING Economics said in a note: “The longer we have to wait for this detail, the more likely market participants will start to question how good a deal it actually is.”
Meanwhile, Chinese data revealed that acceleration of industrial output and retail sales growth was more than expected last month, offering some support to oil prices.