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Home / Business / Oil falls due to concerns about progress in trade talks between the US and China, oversupply business

Oil falls due to concerns about progress in trade talks between the US and China, oversupply business



The price of oil sank on Monday as doubts were cast on the prospects for a trade agreement between the United States and China, while concerns about oversupply also weighed on the market.

Brent crude fell 55 cents or 0.9 percent to $ 61.96 to 3:50 GMT. The contract rose 1.3 percentage points last week.
US crude was 47 cents or 0.8 percent lower at $ 56.77 a barrel, after rising 1.9 percent last week.

Trump said on Saturday that trade talks with China would be "very good", but the US would only negotiate a good deal with Beijing if it was right for America.

The 16-month trade war between the world's two largest economies has slowed global economic growth and led analysts to lower oil demand forecasts, raising concerns over supply shortage in 2020.

Trump also said that there had been false reports of US willingness to raise tariffs in a "Phase 1

" deal that had spurred markets on.

Data over the weekend showed that China's producer prices fell the hardest in more than three years in October, as the manufacturing sector was weakened by the dispute and declining demand.

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

"Supply should remain sufficient in the short term as the Organization of the Petroleum Exporting Countries (Opec) does not want any further cuts while production in Singapore continues North America remains robust," she added.

The outlook for the oil market for next year may have upside potential, Opec Secretary-General Mohammad Barkindo said last week, pointing out that no further production cutbacks are needed.

Opec and its markets Allied allies meet in December. The so-called Opec + alliance, which aims to boost the price of oil, has cut production by 1.2 million barrels per day since January of this year.

Money managers increased their net long positions in US crude oil futures and options by 22,512 contracts to 138,389 during the week ending November 5, according to the US Commodities Commission.

In the US, energy companies reduced the number of oil rigs that ran for a third consecutive week last week. According to Baker Hughes, drills cut seven rigs during the week ending November 8, bringing the total to 684, the lowest since April 2017.


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