Oil costs dropped Monday amid renewed doubts over the prospects of a trade agreement between the U.S. and China, while issues over excess supplies also weighed on the market.
Brent crude was down 55 cents, i.e., 0.9%, at $61.96. The contract surged 1.3% last week.
U.S. crude was 47 cents, or 0.8%, lower at $56.77 a barrel, having surged 1.9% last week.
Trump stated on Saturday that trade discussions with China were moving along “very well,” however, the U.S. would only make a deal with Beijing if it were the best one for America.
The 16-month trade conflict between the world’s two most prominent economies has slowed economic growth around the globe and prompted analysts to lower estimates for oil demand, raising concerns that an excess supply could develop in 2020.
Trump further stated there had been incorrect reporting about U.S. willingness to lift duties as part of a “phase one” settlement, news of which had boosted markets.
Underscoring the impact of the trade conflict, data over the weekend showed that China’s producer costs tanked the most in more than three years last month, as the manufacturing sector weakened, hit by the conflict and declining demand.
The oil industry scope for next year could have upside potential, OPEC Secretary-General Mohammad Barkindo stated last week, suggesting there isn’t any need to cut production.
OPEC and its associates (OPEC+) led by Russia meet next month. The so-called OPEC+ alliance, seeking to spice up oil prices, has since January minimize production by 1.2 million (bpd) until March 2020.
Money managers boosted their net U.S. crude futures and options positions in the week to November 5 by 22,512 contracts to 138,389, the U.S. Commodity Futures Trading Commission (CFTC) stated.