Oil prices have declined on worries that fuel demand could fall after US President Donald Trump’s comments doused optimism over trade talks between the US and China.
Brent crude futures LCOc1 fell 52 cents to $62.58 a barrel, while US West Texas Intermediate (WTI) crude CLc1 slipped to $56.89, down 40 cents, reported Reuters.
OANDA Asia Pacific senior market analyst Jeffrey Halley was quoted by Reuters as saying: “What really pulled the rug from underneath oil was Donald Trump’s comments on trade last night … He’s still maintaining quite a belligerent position.”
At the United National General Assembly, Trump stressed that he would not accept any bad deal in trade negotiations between the two countries.
The recent drone attack on Saudi Arabia’s two oil processing facilities has disturbed supplies from the world’s top exporter. To meet the agreed supplies overseas, Saudi Aramco is buying oil from other Middle East producers.
OCBC economist Howie Lee said: “Right now, the market is very concerned about the demand side of the equation, but I would caution against being complacent about what’s happening in the Middle East.”
Prices also edged down due to an unexpected rise in the US crude inventories last week. Data released by the American Petroleum Institute (API) highlighted a 1.4 million barrels increase in US crude stocks last week, which is against the analysts’ prediction of a 200,000 barrel drawdown.
Investors are currently awaiting official government data to be released by the US Energy Information Administration.