Oil slips as US-China trade deal hopes dwindle

CNBC

Reuters
KEY POINTS
  • Brent crude futures edged down 18 cents, or 0.3%, to $61.88 a barrel by 0411 GMT.
  • U.S. West Texas Intermediate crude was at $56.67, down 13 cents or 0.2%.
GP: Cowboy oil pumpjack oil derrick 191113
Cowboy farmer and oil pumpjack
Getty Images

Oil prices dipped on Wednesday as prospects for a trade deal between the United States and China dimmed, weighing on the outlook for the global economy and energy demand.

U.S. President Donald Trump said on Wednesday that the two countries were close to finalizing a trade deal, but he fell short of providing a date or venue for the signing ceremony, disappointing investors.

Brent crude futures edged down 18 cents, or 0.3%, to $61.88 a barrel by 0411 GMT, while U.S. West Texas Intermediate crude was at $56.67, down 13 cents or 0.2%.

A forecast by the International Energy Agency for slower global oil demand growth post-2025 also weighed on the market.

Global oil demand is expected to grow by 1 million barrels per day (bpd) on average to 2025, but is forecast to slow to 100,000 bpd a year from then on as fuel efficiency improves and more electric vehicles hit the road, the IEA said in its annual World Energy Outlook for the period to 2040.

Even as U.S. production growth slows from the breakneck pace of recent years, the world’s top oil producer will still account for 85% of the increase in global oil output to 2030, and for 30% of the increase in gas, the agency said.

The share of global oil production by members of the Organization of the Petroleum Exporting Countries (OPEC) and Russia is seen falling to 47% for much of the next decade, a level not seen since the 1980s.

“The effects have been striking, with U.S. shale now acting as a strong counterweight to efforts to manage oil markets,” IEA’s Executive Director Fatih Birol said.

In the United States, crude oil inventories were forecast to have risen for a third straight week last week, while refined products inventories likely declined, a preliminary Reuters poll showed on Tuesday.

Five analysts polled by Reuters estimated, on average, that crude inventories rose around 1.6 million barrels in the week to Nov. 8.

ANZ analysts said the prospects for U.S. crude exports had turned bleak after shipping rates jumped last month, causing inventories to stay above both last year’s level and the five-year average.

The American Petroleum Institute (API) is scheduled to release its data for the latest week at 4:30 p.m. EST (2130 GMT) on Wednesday, while the weekly report from the U.S. Energy Information Administration (EIA) is due at 11:00 a.m. EST on Thursday.

Separately, the 590,000 barrel-per-day Keystone oil pipeline that transports Canadian heavy crude to the United States has restarted operations following an oil spill two weeks ago, a U.S. regulator said on Tuesday.

Traders are now eyeing next month’s meeting between the OPEC and Russia to determine if the group would deepen output cuts to prop up prices.

“We believe the production curbs could be extended beyond Q1 2020, although deeper cuts are unlikely,” ANZ analysts said.

Oil market edgy on US crude build, trade deal angst

CNBC

Reuters
KEY POINTS
  • Brent crude futures were down 3 cents, at $61.71 a barrel by 0348 GMT after settling down $1.22 per barrel, or almost 2% on Wednesday.
  • West Texas Intermediate crude futures were at $56.29 a barrel, down 2 cents, from their last close. They settled 88 cents lower, or 1.54%, in the previous session.
GP: Tullow Oil 190812 EU
The Tullow Oil Plc Prof. John Evans Atta Mills Floating Production Storage and Offloading vessel sits docked in Singapore on Jan. 21, 2016.
Nicky Loh | Bloomberg | Getty Images

Oil prices trod water on Thursday after losses in the previous session, as traders were cautious amid concerns over a potential delay in sealing a long-awaited interim U.S.China trade deal and a huge increase of U.S. crude stockpiles.

Brent crude futures were down 3 cents, at $61.71 a barrel by 0348 GMT after settling down $1.22 per barrel, or almost 2% on Wednesday.

West Texas Intermediate crude futures were at $56.29 a barrel, down 2 cents, from their last close. They settled 88 cents lower, or 1.54%, in the previous session.

U.S. crude oil stockpiles rose 7.9 million barrels last week as refiners cut output and exports fell, beating analysts’ expectations for an increase of 1.5 million barrels, the Energy Information Administration (EIA) said on Wednesday.

Gasoline and distillate inventories dropped 2.8 million barrels and by 622,000 barrels respectively.

“The inventory builds and drops in exports is likely related to the COSCO sanctions,” said Stephen Innes, market strategist at AxiTraders, referring to the Chinese tanker firm the United States sanctioned, among others, in late September for alleged involvement in moving crude oil from Iran.

U.S. crude exports fell nearly 1 million barrels last week to 2.4 million barrels per day.

“The sanctions are coming back to haunt oil bulls as a trifecta of negativity if you include the probable delay in signing the Phase one trade deal” between the world’s top two economies and biggest oil consumers, Innes said.

A meeting between U.S. President Donald Trump and Chinese President Xi Jinping to sign an interim deal could be delayed until December as talks continue over terms and venue, a senior official of the Trump administration told Reuters on Wednesday.

It was still possible the “phase one” agreement aimed at ending a damaging trade war would not be reached, but a deal was more likely than not, the official said on condition of anonymity.

Expectations for a thaw in trade tensions have supported oil prices over the past several sessions

Jeffrey Halley, senior market analyst at OANDA, said the discouraging trade deal news and a massive rise in U.S. crude inventories pulled down both Brent and WTI overnight.

“Both contracts are unchanged in early trading. We expect this status quo to continue throughout the session,” Halley added.

Oil prices edge lower ahead of US stockpile numbers

CNBC

Reuters
KEY POINTS
  • Brent futures were down 6 cents at $61.51 a barrel by 0311 GMT, having fallen 0.7% on Monday.
  • U.S. West Texas Intermediate (WTI) crude was down 12 cents at $55.69, after falling 1.5% in the previous session.
GP: Oil Tankers on the Mississippi in Louisiana 191029
A line of oil tankers transporting fuel to the refineries located along the Mississippi River just north of New Orleans, Louisiana.
Art Wager | Getty Images

Oil prices slipped on Tuesday as investors awaited U.S. crude inventory data for a pointer on oil demand trends, while concerns about slower economic growth overshadowed signs of a thawing in the trade war between Washington and Beijing.

Brent futures were down 6 cents at $61.51 a barrel by 0311 GMT, having fallen 0.7% on Monday.

U.S. West Texas Intermediate (WTI) crude was down 12 cents at $55.69, after falling 1.5% in the previous session.

Prices rose sharply last week amid a decline in U.S. inventories and signs of an easing in the U.S.-China trade war, but worries on Monday about weaker economic growth offset hopes of a rise in oil demand even if trade talks progress.

“The inventory read last week is still reverberating through trading, although we did see that finally start to give way last night, but we can see there is very little appetite to go on with it today,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

U.S. crude inventories were forecast to have increased by around 700,000 barrels last week, according to a Reuters poll of analysts, having unexpectedly fallen the previous week, the first decline in six weeks.

U.S. crude oil stockpiles at Cushing, Oklahoma, the delivery point for WTI, have risen by about 1.5 million barrels in the week through Oct. 25, traders said earlier, citing data from market intelligence firm Genscape.

The American Petroleum Institute releases industry data later on Tuesday, while the U.S. government’s Energy Information Administration releases inventory data on Wednesday.

The United States Trade Representative is studying whether to extend tariff suspensions on $34 billion of Chinese goods set to expire on Dec. 28 this year, the agency said on Monday.

U.S. President Donald Trump said earlier on Monday he expected to sign a significant part of the trade deal with China ahead of schedule but did not elaborate on the timing.

Leaders of the world’s two biggest economies are working to agree on the text for a “Phase 1” trade agreement announced by Trump on Oct. 11. Trump has said he hopes to sign the deal with China’s President Xi Jinping next month at a summit in Chile.

The trade war has hit economic growth around the world and kept oil prices range-bound for months.

Oil steady on weak demand concerns despite US-China trade optimism

CNBC

Reuters
KEY POINTS
  • Oil prices were little changed Tuesday as lingering worries over a global economic slowdown that could hurt oil demand offset some signs of progress in U.S.-China trade talks.
  • Brent crude oil futures were down 6 cents, or 0.1% to $58.90 a barrel by 0309 GMT.
  • U.S. West Texas Intermediate (WTI) crude futures  were flat at $53.31 per barrel.
RT: Oil field worker, Texas 190919
Oil field worker, Miguel Holguin, operates a swabbing rig in a field in Seminole, TX, September 19, 2019.
Adria Malcolm | Reuters

Oil prices were little changed Tuesday as lingering worries over a global economic slowdown that could hurt oil demand offset some signs of progress in U.S.-China trade talks.

Brent crude oil futures were down 6 cents, or 0.1% to $58.90 a barrel by 0309 GMT, while U.S. West Texas Intermediate (WTI) crude futures were flat at $53.31 per barrel.

U.S. President Donald Trump on Monday said efforts to end a U.S. trade war with China were going well as negotiators from the two nations work to nail down a Phase 1 trade deal text for their leaders to sign next month when they meet at November’s APEC summit.

“Commodity markets were cautiously optimistic amid signs that a trade deal was close to being signed by the United States and China,” ANZ bank said in a note.

“Crude oil prices remained in the doldrums, with ongoing economic weakness weighing on sentiment,” it added.

Brent has fallen 22% from its April peak, while WTI is down 20%.

Although there are some signs of easing tensions between the world’s two largest economies, U.S. Commerce Secretary Wilbur Ross said on Monday that an initial trade deal doesn’t need to be finalized next month, emphasizing the need to get the right deal.

Adding to tensions, China is seeking $2.4 billion in retaliatory sanctions against the United States for non-compliance with a WTO ruling in a tariffs case dating back to the era of President Barack Obama.

“In the short term, a possibility of the United States and China signing an initial deal could support prices, but it remains to see whether tariffs set for December will be removed,” said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul.

Russia’s missed target for cutting its September oil output was also putting downward pressure on prices, along with talks between Saudi Arabia and Kuwait to resume oil production from joint oil fields in the Neutral Zone, Kim said.

Russia, the world’s second-largest oil producer, pumped more oil in September than it pledged under a global supply cut deal due to an increase in natural gas condensate output.

As well, U.S. crude stockpiles are expected to have increased for a sixth straight week, while distillates and gasoline stocks likely fell in the week to Oct. 18, a preliminary Reuters poll showed on Monday.

Oil prices extend fall on China, global demand concerns

REUTERS

SINGAPORE (Reuters) – Oil prices fell on Tuesday, after heavy losses in the previous session, as two days of weak Chinese data added to worries about the top crude oil importer’s energy demand growth.

Brent crude LCOc1 fell 42 cents, or 0.71%, to $58.93 a barrel by 0720 GMT, while U.S. West Texas Intermediate (WTI) crude CLc1 dropped 44 cents, or 0.82%, to $53.15.

China has been hit by poor economic data for two straight days. The National Bureau of Statistics (NBS) reported on Tuesday that China’s factory gate prices declined at the fastest pace in more than three years in September.

That followed customs data on Monday that showed Chinese imports had contracted for a fifth straight month.

The U.S.-China trade dispute also continued to cast a shadow on the global economy, despite claims of progress toward a deal, leaving unanswered questions over future oil demand.

Taken all together that was enough to outweigh any support oil prices might have received from worries about possible escalation of geopolitical tensions in the Middle East.

“Demand-side concerns emerging from the Sino-U.S. trade war have continued to weigh on oil prices,” said Abhishek Kumar, head of analytics at Interfax Energy in London.

“China’s weak economic data is a manifestation of the trade dispute,” he said.

On Monday U.S. President Trump imposed sanctions on Turkey and demanded the NATO ally stop a military incursion in northeast Syria that is rapidly reshaping the battlefield of the world’s deadliest ongoing war.

Prices could also get a boost this week as investors are expecting a drawdown in crude inventories in the United States.

“This week … markets are expecting to see a draw (on) U.S. stockpiles and possibly further escalations in the Middle East,” said Edward Moya, senior market analyst at OANDA.

The next weekly U.S. oil inventory reports are due out from industry group the American Petroleum Institute and the U.S. Energy Information Administration on Oct. 16.

Reporting by Seng Li Peng; Editing by Tom Hogue