Oil retreated from a seven-week high as investors assessed mixed signals on the progress of U.S.-China trade negotiations.
Futures fell 0.7% in New York after gaining 1.9% last week. President Donald Trump said the trade talks were moving along “very nicely,” but he also described reports on how much the U.S. was ready to roll back tariffs as incorrect. Meanwhile, Wood Mackenzie Ltd. said it sees a “pretty high chance” that OPEC and its allies will slightly extend production cuts next month.
Oil has rallied around 9% since early October as the world’s two largest economies moved closer toward a limited trade agreement, while data last week showed some signs of improvement in the U.S. and Chinese economies. That optimism has been reflected in hedge-fund bets, with net-long positions on West Texas Intermediate crude rising for a third straight week.
Investors remain hostage to the rapid shifts in the U.S.-China trade negotiations, Stephen Innes, Asia Pacific market strategist at AxiTrader, said in a note. But it’s ultimately the economic data that matter and, on that front, things are improving, he said.
WTI for December delivery fell 40 cents, or 0.7%, to $56.84 a barrel on the New York Mercantile Exchange as of 10:07 a.m. in Singapore. It settled 0.2% higher on Friday at $57.24, the highest close since Sept. 24.
Brent for January dropped 0.8% to $62.04 a barrel on the London-based ICE Futures Europe Exchange after climbing 1.3% last week. The global crude benchmark traded at a $5.17 premium to WTI for the same month.