Oil falls by 1% due to trade negotiations and the growth of American production
January 10, 2019 @ 13:32 UTC
Oil prices fell more than 1 percent on Thursday due to the lack of any clear resolution to U.S.-China trade talks and official data that again indicated vast fuel stocks in the United States. U.S. West Texas Intermediate (WTI) crude oil futures CLc1 were at $51.66 per barrel at 0950 GMT, down 70 cents, or 1.3 percent, from their last settlement. International Brent crude futures LCOc1 were also down 1.3 percent, or 79 cents, at $60.65 per barrel.
Both benchmarks rose by around 5 percent the previous day, capping off a week-long climb that marked oil’s longest sustained rise since last summer. Global financial markets had surged on hopes that Washington and Beijing may soon end their dispute and avert an all-out trade war between the two biggest economies.
Some of the positive feeling ebbed on Thursday, however, a day after negotiations wrapped up with mildly positive statements from both sides but few details. The U.S. Trade Representative’s offices said in a statement on Wednesday that the two sides discussed “ways to achieve fairness, reciprocity and balance in trade relations”. China’s Commerce Ministry said the talks “established a foundation for the resolution of each others’ concerns”.
Meanwhile, U.S. bank Morgan Stanley cut its 2019 oil price forecasts by more than 10 percent on Wednesday, pointing to weakening economic growth expectations and rising oil supply, especially from the United States. The bank now expects Brent to average $61 a barrel this year, down from a previous estimate of $69, and U.S. crude to average $54, against a prior forecast of $60.
Oil drops 1 percent on U.S.-China trade talks, American supply surge, Reuters, Jan 10