There was a decline in U.S oil prices today, pressured by limited progress in efforts to resolve the trade conflict between the country and China as well as an expected rise in U.S. crude inventories.
The Details: New Telegraph reported that West Texas Intermediate (WTI) crude CLc1 dropped 32 cents or 0.56% to $56.73 a barrel by 0803 GMT, slipping further away from an eight-week high hit last Friday when hopes for the trade deal rose. Brent crude futures LCOc1 also declined 26 cents, or 0.42%, at $62.18 a barrel.
The mood in Beijing is rather gloomy, as reported by a CNBC broadcaster on Monday. While hopes are expectant of a trade deal, a comment from U.S. President Donald Trump crashed those expectations, ruling out any thought that the trade conflict between both countries will end.
“We had reports overnight that the mood in Beijing was pessimistic,” said Michael McCarthy, a 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,” McCarthy, added.
A preliminary poll conducted by Reuters on Monday showed U.S. crude oil stockpile was expected to rise for a fourth straight week also squeezed prices. Meanwhile, the American Petroleum Institute is expected to release its data for the latest week at 4:30 p.m. EDT (2030 GMT) today, while the Energy Information Administration’s official weekly report is due tomorrow, 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.
The trade battle between the US and China has heavily impacted the global oil market and negatively affected the future of oil. On the other hand, renewed geopolitical tensions by armed members of Yemen’s Iran-aligned Houthi movement have only made matters worse.