Oil eases amid concern over US-China trade talks dragging on

CNBC

Reuters
KEY POINTS
  • West Texas Intermediate (WTI) crude dropped 27 cents or 0.47% to $56.78 a barrel by 0549 GMT, slipping further away from an eight-week high hit last Friday when hopes for the trade deal rose.
  • Brent crude futures were down 20 cents, or 0.32%, at $62.24.
GP: US Oil Workers Oil Boom in Texas's Permian Basin 191030
Workers extracting oil from oil wells in the Permian Basin in Midland, Texas on May 1, 2018.
Benjamin Lowy | Getty Images

U.S. oil prices fell for the second straight day on Tuesday amid market jitters over limited progress between China and the United States on rolling back trade tariffs, while rising U.S. inventories also jangled nerves.

West Texas Intermediate (WTI) crude dropped 27 cents or 0.47% to $56.78 a barrel by 0549 GMT, slipping further away from an eight-week high hit last Friday when hopes for the trade deal rose.

Brent crude futures were down 20 cents, or 0.32%, at $62.24.

A Chinese government source was quoted by broadcaster CNBC on Monday as saying there was gloom in Beijing about prospects for a trade deal, with Chinese officials troubled by U.S. President Donald Trump’s comment that there was no agreement on phasing out tariffs.

“We had reports overnight that the mood in Beijing was pessimistic,” said Michael McCarthy, chief market strategist at brokerage CMC Markets in Sydney.

“The lack of announcement is really concerning for the demand outlook … the market is very nervous about the trade talks.”

The lingering trade battle that has seen the world’s two biggest economies impose tit-for-tat tariffs on each other has hit global growth prospects and clouded the outlook for future oil demand.

Meanwhile a preliminary Reuters poll on Monday showing U.S. crude oil stockpile were seen rising for the fourth straight week also squeezed prices.

The American Petroleum Institute is scheduled to release its data for the latest week at 4:30 p.m. EDT (2030 GMT) on Tuesday, while the Energy Information Administration’s official weekly report is due on Wednesday.

“Unless we get further concrete signs of global growth rally or an extension in production cuts by OPEC+ (the Organization of the Petroleum Exporting Countries and associated producers including Russia), WTI will struggle to attempt to recapture the $60-a-barrel mark,” said Edward Moya, senior market analyst at OANDA in New York.

One possible factor supporting prices going forward was a renewal in geopolitical tensions, with news from Dubai that armed members of Yemen’s Iran-aligned Houthi movement had seized a vessel towing a South Korean rig at the southern end of the Red Sea over the weekend.

Oil prices steady after last week’s gains, look to US-China talks

CNBC

Reuters
KEY POINTS
  • Brent crude futures were at $63.30 a barrel at 0512 GMT, unchanged from the previous session. The contract rose 1.3% last week.
  • West Texas Intermediate (WTI) crude were also unchanged at $57.72 a barrel, having gained 0.8% last week.
GP: oil barrels 191118
An employee holds a control panel as barrels are filled with lubricant oil in Torzhok, Russia, on March 21, 2014.
Andrey Rudakov | Bloomberg | Getty Images

Oil prices were little changed on Monday following steady gains in the previous week with investors awaiting fresh clues over prospects for a trade deal between the United States and China, shrugging off concerns over steadily rising oil supplies.

Brent crude futures were at $63.30 a barrel at 0512 GMT, unchanged from the previous session. The contract rose 1.3% last week.

West Texas Intermediate (WTI) crude were also unchanged at $57.72 a barrel, having gained 0.8% last week.

The “crude oil market is flat on Monday morning, as price consolidates after Friday’s big rally,” said Margaret Yang, market analyst at CMC Markets.

Oil futures gained nearly 2% on Friday as comments from a top U.S. official raised optimism for a U.S.-China trade deal, but worries about increasing crude supplies capped prices.

The 16-month trade war between the world’s two biggest economies and oil consumers has slowed growth around the world and prompted analysts to lower forecasts for oil demand, raising concerns that a supply glut could develop in 2020.

China and United States had “constructive talks” on trade in a high-level phone call on Saturday, state media Xinhua said, but offered few other details in a report released on Sunday.

“In the short term, U.S.-China trade talks and OPEC meeting in early December are the two biggest events oil traders are watching for,” said Yang.

The Organization of the Petroleum Exporting Countries (OPEC) said on Thursday it expected demand for its oil to fall in 2020, supporting a view among market participants that there is a case for the group and other producers like Russia — collectively known as ‘OPEC+’ — to maintain limits on production that were introduced to cope with a supply glut.

OPEC and its allies are expected to discuss output policy at a meeting on Dec. 5-6 in Vienna. Their existing production deal runs until March.

A monthly report from the International Energy Agency (IEA) released on Thursday put downward pressure on prices, after it estimated that non-OPEC supply growth would increase to 2.3 million barrels per day (bpd) next year compared, with 1.8 million bpd in 2019, citing production from the United States, Brazil, Norway and Guyana.

Data released on Thursday also showed weekly U.S. crude stockpiles grew by 2.2 million barrels, the Energy Information Administration (EIA) said, exceeding the 1.649 million-barrel rise forecast by analysts in a Reuters poll.

Oil drops on concern over US-China trade talks progress, oversupply

CNBC

Reuters
KEY POINTS
  • Brent crude was down 55 cents, or 0.9%, at $61.96 by 0350 GMT. The contract rose 1.3% last week.
  • U.S. crude was 47 cents, or 0.8%, lower at $56.77 a barrel, having risen 1.9% last week.
GP: Azerbaijan Oil Industry 191008
Azeri oil workers operate a large field of drilling rigs on October 12, 2003 outside the capital city of Baku.
Oleg Nikishin | Getty Images

Oil prices fell on Monday amid renewed doubts over the prospects of a trade deal between the United States and China, while concerns over excess supplies also weighed on the market.

Brent crude was down 55 cents, or 0.9%, at $61.96 by 0350 GMT. The contract rose 1.3% last week.

U.S. crude was 47 cents, or 0.8%, lower at $56.77 a barrel, having risen 1.9% last week.

U.S. President Donald Trump said on Saturday that trade talks with China were moving along “very nicely,” but the United States would only make a deal with Beijing if it was the right one for America.

The 16-month trade war between the world’s two biggest economies has slowed economic growth around the world and prompted analysts to lower forecasts for oil demand, raising concerns that a supply glut could develop in 2020.

Trump also said there had been incorrect reporting about U.S. willingness to lift tariffs as part of a “phase one” agreement, news of which had boosted markets.

Underlining the impact of the trade war, data over the weekend showed that China’s producer prices fell the most in more than three years in October, as the manufacturing sector weakened, hit by the dispute and declining demand.

“Oil prices are dampened by re-escalating trade uncertainties and a strengthening U.S. dollar,” said Margaret Yang, market analyst at CMC Markets in Singapore.

“Supply is expected to remain ample in the near term as OPEC showed it is reluctant for further cuts, while production in North America remains robust,” she added.

The oil market outlook for next year may have upside potential, OPEC Secretary-General Mohammad Barkindo said last week, suggesting there is no need to cut output further.

The Organization of the Petroleum Exporting Countries and its allies led by Russia meet in December. The so-called OPEC+ alliance, seeking to boost oil prices, has since January cut output by 1.2 million barrels per day until March 2020.

Money managers boosted their net long U.S. crude futures and options positions in the week to Nov. 5 by 22,512 contracts to 138,389, the U.S. Commodity Futures Trading Commission (CFTC) said.

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

Oil prices edge up, but US-China trade tensions cap gains

CNBC

Reuters

KEY POINTS
  • Brent crude futures were at $70.27 a barrel at 0104 GMT, up 6 cents, or 0.1%, from their last close. Brent ended the previous session little changed.
  • U.S. West Texas Intermediate (WTI) crude futures were at $61.17 per barrel, up 12 cents, or 0.2%, from their previous settlement. WTI closed the last session steady on the day.
Reusable: Oil storage refinery Australia Caltex Oil 141014
Jason Reed | Reuters

Oil prices inched higher on Tuesday, though gains were checked amid an escalation in the trade war between the United States and China.

Brent crude futures were at $70.27 a barrel at 0104 GMT, up 6 cents, or 0.1%, from their last close. Brent ended the previous session little changed.

U.S. West Texas Intermediate (WTI) crude futures were at $61.17 per barrel, up 12 cents, or 0.2%, from their previous settlement. WTI closed the last session steady on the day.

Analysts said the U.S.-China trade war was overshadowing the market, though market fundamentals provided some support.

“A full-blown trade war would have lasting consequences on global growth, seriously limiting the upside for energy demand. Disruptions have balanced the market, but lower demand and rising U.S. production could make for a quick reversal,” said Alfonso Esparza, senior market analyst, OANDA.

China defied a warning from U.S. President Donald Trump and moved to impose higher tariffs on a range of U.S. goods including frozen vegetables and liquefied natural gas.

Focus was also on the Middle East after Saudi Arabia on Monday said that two of its oil tankers were among those attacked off the coast of the United Arab Emirates and described it as an attempt to undermine the security of crude supplies amid tensions between the United States and Iran.

The U.S. Energy Department said on Monday that it was confident global oil markets are well supplied.

Oil rises as China, US set for trade talks, but markets weary of slowing demand

CNBC

  • Oil prices on Thursday recouped some of the previous day’s losses.
  • Beijing said it would send a delegation to Washington to try to resolve trade disputes between the United States and China that have roiled global markets.

Pump jacks in an oil field over the Monterey Shale formation near Lost Hills, Calif.

Getty Images
Pump jacks in an oil field over the Monterey Shale formation near Lost Hills, Calif.

Oil prices on Thursday recouped some of the previous day’s losses after Beijing said it would send a delegation to Washington to try to resolve trade disputes between the United States and China that have roiled global markets.

Brent crude oil futures were at $71.03 per barrel at 0455 GMT, up 27 cents, or 0.4 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were up 5 cents at $65.06 a barrel, held back somewhat by rising U.S. crude production and storage levels.

Both benchmarks lost more than 2 percent during the previous day’s trading.

Traders said Thursday’s markets were pushed up by news that a Chinese delegation led by Vice Minister of Commerce Wang Shouwen will hold talks with U.S. representatives led by Under Secretary of Treasury for International Affairs David Malpass later in August.

China and the United States have implemented several rounds of tit-for-tat tariffs on each others goods and threatened further tariffs on exports worth hundreds of billions of dollars.

Sentiment in oil markets was also cautious due to the rise in U.S. crude production and storage levels as well as weakness in emerging market economies, especially in Asia, that could limit demand growth.

Oil prices sink to lows not seen since June

Oil prices sink to lows not seen since June  

Output of U.S. crude rose by 100,000 barrels per day (bpd) in the week ending Aug. 10, to 10.9 million bpd, according to the U.S. Energy Information Administration (EIA) weekly production and storage report.

At the same time, U.S. crude inventory levels climbed by 6.8 million barrels, to 414.19 million barrels, the EIA said.

“This build certainly hasn’t helped market sentiment,” Dutch bank ING said after the release of the EIA report.

While supply rose in the United States, Asia’s markets were showing signs of economic slowdown due to trade disputes with the United States and currency weakness, dragging on oil market sentiment.

“Oil prices continue to exude for bearish signals as investors worry on weaker global demand and rising production levels,” Benjamin Lu of Singapore-based brokerage Phillip futures wrote in a note.

In Japan, official data on Thursday showed a slowdown in export growth as well as a decline in crude oil imports.

Asia’s currencies also remained under pressure, with the dollarholding near 13-month peaks on Thursday as political turmoil in Turkey and concerns about China’s economic health continued to support safe-haven assets.

Providing Brent crude with some support were looming U.S. sanctions against Iran’s oil exports, set to start from November, with Asian buyers including India, South Korea and Japan already scaling back orders in anticipation.

“The might of U.S sanctions has shown… as petroleum importers have reduced purchase orders from Tehran,” Lu said.