New York: Oil held losses after snapping a three-day rally on signs of a stumble in the U. S-China trade dispute and indications the biggest Opec+ producers aren’t seeking deeper output cuts.
Futures were little changed in New York after falling 1.5 per cent on Wednesday, the first decline in four sessions.
West Texas Intermediate for December delivery dropped 1 cent to $56.34 a barrel on the New York Mercantile Exchange as of 6:40am. London time. The contract fell 88 cents to close at $56.35 on Wednesday, snapping a 5.6 per cent gain over three days.
Brent for January settlement slid 4 cents to $61.70 a barrel on the ICE Futures Europe Exchange. The contract dropped $1.22 to $61.74 on Wednesday. The global benchmark crude traded at a $5.34 premium to WTI.
President Donald Trump and his counterpart Xi Jinping may not be able to sign a partial trade deal until December, bringing a halt to the exuberance seen across markets this week. Opec and its allies are more likely to stick to their current output targets when the group meets next month, according to delegates across the coalition.
Oil is down about 15 per cent since an April peak as the prolonged trade spat between Beijing and Washington dented demand and as global supplies swelled. US crude inventories surged by 7.9 million barrels last week, almost four times more than the median estimate in a Bloomberg survey.
The likelihood of a US-China deal is again “up in the air” after days of optimism, said Howie Lee, a Singapore-based economist at Oversea-Chinese Banking Corp. “Beyond the volatility that we see day-to-day, if you take a step back and look at the bigger picture, it’s this uncertainty that is hitting global demand growth.”
Two US locations have been ruled out for the highly anticipated meeting between Trump and Xi, according to a person familiar with the matter. The two sides have been trying to negotiate a limited trade deal that would entail the US dropping some tariffs on Chinese imports in exchange for Beijing resuming purchases of American farm goods and other products.
Russia’s Energy Minister Alexander Novak said on Wednesday that the market is rather balanced and a more than $60 a barrel price for Brent indicated that the situation is stable. Ministers from the Organisation of Petroleum Exporting Countries meet in Vienna on Dec. 5 and 6.