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 per cent, at $61.96 by 3:50am GMT. The contract rose 1.3pc last week. US crude was 47 cents, or 0.8pc, lower at $56.77 a barrel, having risen 1.9pc last week.
Trump said on Saturday that trade talks with China were moving along “very nicely”, but the US 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.ARTICLE CONTINUES AFTER AD
Trump also said there had been incorrect reporting about US 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 US dollar,” said Margarat Yang, market analyst at CMC Markets in Singapore.
“Supply is expected to remain ample in the near term as Organisation of the Petroleum Exporting Countries (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.
Opec 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 US crude futures and options positions in the week to November 5 by 22,512 contracts to 138,389, the US Commodity Futures Trading Commission said.
In the US, 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 November 8, bringing the total count down to 684, the lowest since April 2017, Baker Hughes said.