Crude falls, along with hopes for a new U.S.-China trade deal
NEW YORK (Bloomberg) - Oil dropped the most in two weeks amid concern that the recent U.S.-China trade talks won’t lead to a deal.
Futures in New York slid 2% on Monday. Washington and Beijing made several concessions to reach a partial trade deal last week, but China said it wants to hold further talks this month to hammer out details of the “phase one” agreement touted by U.S. President Donald Trump.
“The bearish impetus came from talks that the U.S.-China trade deal might not come forward,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts.
Despite threats to oil supply in recent months -- including an attack on Saudi Arabia’s oil facilities -- investors are focused on the uncertainty around trade talks and a weak global demand outlook.
WTI for November delivery dropped $1.11 to settle at $53.59/bbl on the New York Mercantile Exchange. Prices rose 3.6% last week.
Brent crude for December settlement slid $1.16 to end the session at $59.35/bbl on the ICE Futures Europe Exchange. The global benchmark traded at a premium of $5.70/bbl to WTI for the same month.
China also wants Trump to scrap a planned tariff hike in December in addition to the hike scheduled for this week, something the administration hasn’t yet endorsed, according to a person familiar with the matter.
It looks like China is trying to negotiate some terms and what led prices to rise Friday “isn’t headline worthy today,” says Thomas Finlon, director of Energy Analytics Group in Wellington, Florida.
