Oil prices have dropped 1% amid renewed doubts over the prospects of the US and China trade deal.

Concerns over excess supplies also added to the decline of oil. Brent crude was down 69 cents to $61.82 a barrel while US West Texas Intermediate (WTI) crude was 63 cents at $56.61 a barrel, reported Reuters.

US President Donald Trump said that trade negotiations with China were progressing well and also stressed a deal will be agreed ‘if it was a right one for America’. He also noted that reports of US intentions to ‘lift tariffs as part of a phase one agreement’ were incorrect.

Phillip Futures analyst was quoted by Reuters as saying: “China delivered a massive deflationary shock in its factories, providing a somber tone towards the fragile state of the global economy.”

Reuters also cited analysts as saying that investors showed concern about excess supplies of crude.

The US Commodity Futures Trading Commission (CFTC) said net long US crude futures and options positions were boosted by 22,512 contracts to 138,389 in the week of 5 November 2019.

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OPEC secretary-general Mohammad Barkindo also noted that the 2020 market outlook may have upside potential and further suggested that there isn’t any requirement to make output cuts.

In the US, energy companies reduced the number of operating oil rigs for a straight third week. Baker Hughes mentioned that drillers cut seven rigs, bringing the total count down to 684, which is noted to be the lowest since April 2017.