Oil prices have declined amid fresh fronts in the US-China trade war that resulted in a slowing demand outlook globally.

Brent futures dipped 11 cents at $64.14 a barrel, while the West Texas Intermediate (WTI) oil futures were down ten cents at $58.92 a barrel, reported Reuters. Oil prices also witnessed a fall as the cons of a slowing global demand outlook outweighed the pros of OPEC’s agreement to cut production.

ANZ Bank was quoted by Reuters as saying in a note: “The euphoria (on output cuts) was short-lived, with an unexpected fall in exports from China highlighting the impact of the trade conflict.”

The next round of US tariffs against some $156bn Chinese goods is expected to come into force from 15 December 2019. According to the US Agriculture Secretary Sonny Perdue, US President Donald Trump does not want to implement the next round of taxes but he expects ‘movement’ from China to avoid the tariffs.

The decision by OPEC+ to deepen output cuts from the existing 1.2 million barrels per day (Mbpd) to 1.7Mbpd would be a mid-term support factor for oil prices though overshadowed for now, analysts said.

Eurasia Group global energy and natural resources director Henning Gloystein said: “Despite the voluntary restraint from OPEC, world oil markets remain well supplied with non-OPEC output expected to rise by well over 2Mbpd next year, with big increases in the US, Brazil, and Norway.”

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By GlobalData

Since OPEC began capping supply in 2017, US crude production has increased from about 8.8Mbpd to a record 13Mbpd recently. Deepening of supply cuts is expected to further rise in 2020.