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Home / Business / Oil drops in concern over progress in US-China trade talks, oversupply – Business

Oil drops in concern over progress in US-China trade talks, oversupply – Business



On Monday, oil prices fell amid doubts about the prospects for a US-China trade agreement, while concerns about redundant supplies also outweighed the market.

Brent crude was down 55 cents, or 0.9 percent, to $ 61.96 by 3:50 GMT. The contract rose 1.3 units last week.
US crude oil was 47 cents, or 0.8 pc, down to $ 56.77 a barrel, after rising 1.9 pcs last week.

Trump said on Saturday that trade talks with China were moving "very nicely," but the United States would only make a deal with Beijing if it was right for America.

The 16-month trade war between the world's two largest economies has slowed economic growth around the world, prompting analysts to lower oil demand forecasts, raising concerns that glut supply could develop in 2020.

Trump also said there had been incorrect reporting of the US's willingness to raise tariffs as part of a "phase one" agreement, where news had lifted markets.

Emphasizing the effects of the trade war, data over the weekend showed that China's producer prices fell most for more than three years in October, as the industry weakened, hit by the dispute and falling demand.

"Oil prices are dampened by re-escalating trade uncertainties and a strengthening US dollar," said Margarat Yang, market analyst at CMC Markets in Singapore.

"The supply is expected to remain plentiful in the short term, as the Organization of the Petroleum Exporting Countries (Opec) showed reluctance for further cuts, while production in North America is still robust," she added.

The prospects for the oil market for next year may have potential upwards, said Opec Secretary General Mohammad Barkindo last week, suggesting that there is no need to further reduce production.

Opec and its allies led by Russia meet in December. The so-called Opec + alliance, which seeks to increase oil prices, has since January cut production by 1

.2 million barrels per day until March 2020.

Money managers strengthened their net long US crude futures and option positions in the week to November 5 within 22,512 contracts to 138,389, said the United States Commodity Futures Trading Commission.

Last week, in the United States, energy companies reduced the number of oil rigs operating for a third week in a row. Drills cut seven rigs during the week to Nov. 8, bringing the total to 684, the lowest since April 2017, Baker Hughes said.


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