Oil falls more than 2% on doubts around phase one of U.S.-China trade deal

By Laila Kearney NEW YORK (Reuters) - Oil prices slumped more than 2% on Monday on worries that global crude demand could stay under pressure as a lack of details about the first phase of a U.S.-China trade deal dimmed hopes for a quick resolution to the tariff fight. Brent crude dropped $1.26, or 2.1%, to $59.25 a barrel by 12:19 p.m. EDT (18:19 GMT), while U.S.

Reuters October 15, 2019 01:06:15 IST
Oil falls more than 2% on doubts around phase one of U.S.-China trade deal

Oil falls more than 2 on doubts around phase one of USChina trade deal

By Laila Kearney

NEW YORK (Reuters) - Oil prices slumped more than 2% on Monday on worries that global crude demand could stay under pressure as a lack of details about the first phase of a U.S.-China trade deal dimmed hopes for a quick resolution to the tariff fight.

Brent crude dropped $1.26, or 2.1%, to $59.25 a barrel by 12:19 p.m. EDT (18:19 GMT), while U.S. West Texas Intermediate (WTI) crude lost $1.20, or 2.2%, to $53.50 a barrel.

Late on Friday, Washington and Beijing outlined the first stage of a trade deal and suspended this week's scheduled U.S. tariff hikes. Brent and WTI rose more than 3% last week, their first weekly increase in three, on signs of progress toward a trade deal that would boost crude demand.

But existing tariffs remain in place and officials on both sides said much more work was needed before an accord could be agreed.

The market was reacting to a "less than robust trade agreement with China where we're still awaiting details," said Andy Lipow, president of Lipow Oil Association in Houston.

"That is in the face of declining demand growth forecasts for the oil market that we've seen come out over the last several months."

A good portion of the gains last week came after the United States announced on Friday it was deploying more troops to Saudi Arabia, and after an Iranian oil tanker was attacked in the Red Sea.

"While the market waits for potential responses from the Iranians, the continued inability of geopolitics to sustain price gains is a testament to the state of concerns over demand," JBC analysts said in a note.

Oil prices drew support from worries that further escalation along the Syrian and Turkish border could affect output or exports from Iraq. Syrian troops entered a northeastern town on Monday.

The Saudi energy minister, Prince Abdulaziz bin Salman, said oil exporters were showing serious commitment to global output cuts in a deal between OPEC and its allies, a grouping known as OPEC+.

Russian Energy Minister Alexander Novak said there were no talks underway to change the OPEC+ deal.

Kuwait's oil minister said it was too early to discuss a possible buildup in oil inventories in 2020. Khaled al-Fadhel said a price range of $50-70 per barrel would be acceptable.

The compliance of OPEC+ producers with the supply-reduction agreement was seen at above 200% in September, sources familiar with the matter said.

China showed strong demand for oil, with its September imports rising 10.8% from a year earlier as refiners ramped up output.

(Additoinal reporting by Bozorgmehr Sharafedin in London, Florence Tan and Seng Li Peng; Editing by Kirsten Donovan, Chris Reese and David Gregorio)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.