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November 8, 2019

Oil prices drop on uncertainty over US-China trade deal

Crude oil has slipped amid doubts on whether the trade deal between the US and China will be reached.

Crude oil prices have slipped amid doubts on whether the trade deal between the US and China will be reached.

The drop has also been complemented by rising US crude inventories.

Global brent crude was down $0.44, at $61.85 a barrel, while US West Texas Intermediate (WTI) crude was down $0.50, at $56.65 a barrel, reported Reuters.

Trade disputes between the two nations have led analysts to lower oil demand forecasts and raise concerns over 2020 supply glut.

The news agency cited Chinese commerce ministry as saying that ‘the two countries have agreed in the past two weeks to cancel trade tariffs in different phases’.

AxiTrader Asia Pacific market strategist Stephen Innes said: “Oil is in pause mode as traders await more details on the trade talks.”

OPEC secretary-general Mohammad Barkindo also made known his optimism on the 2020 market outlook due to the positive developments on trade disputes.

Innes further noted that Barkindo’s comments are ‘spooking the market, especially in the face of the seemingly never-ending run of US inventory builds’.

Meanwhile, stocks at the delivery hub for WTI in Cushing, Oklahoma, rose by 1.7Mmbbls, noted EIA.

The Organization of the Petroleum Exporting Countries (OPEC) and allies are set to meet in Vienna on 5-6 December. A deal between the producers has limited supplies until March 2020.

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