(Bloomberg) -- Oil fell for the third day this week amid signs the U.S. and China aren't close to resolving their trade spat ahead of a March 1 deadline.
Futures fell 2.5 percent in New York, joining a slide for U.S. equities. Markets hit a wall after White House economic adviser Larry Kudlow said a “sizable distance" remained in negotiations between the world's two biggest economies. Later in the day, President Donald Trump said he didn't expect to meet with his Chinese counterpart before the end of the month, when Trump's threatened to increase tariffs.
“Clearly if we have an all-out trade war, with quite a bit of the market's growth slated to come from China and other emerging markets, that ain't bullish for oil," said Kyle Cooper, a Houston-based consultant at Ion Energy Group LLC.
Oil has faltered this month after its best January on record. Higher American output is threatening to offset reductions by the Organization of Petroleum Exporting Countries and its partners. While sanctions on Venezuela and Iran have propped up prices, investors are still wary about the global economy. Prices retreated earlier on Thursday as official growth forecasts for major European economies were slashed.
Crude and other dollar-priced commodities also slipped as the U.S. currency strengthened Thursday.
West Texas Intermediate crude for March delivery slipped $1.37 to $52.64 a barrel at the close of trading on the New York Mercantile Exchange; it's fallen 4.7 percent so far this week.
Brent for April settlement dropped $1.06, or 1.7 percent, to $61.63 a barrel on the London-based ICE Futures Europe exchange.
Canadian crude prices also weakened as two critical oil pipelines out of the oil-sands region remained partially closed amid an investigation into a possible leak in Missouri.
Heavy Western Canadian Select for March traded at $10.30 discount to WTI, widening from a $9.25 discount earlier Thursday. Prices weakened as shutdowns of portions of TransCanada Corp.'s Keystone pipeline and Enbridge Inc.'s Platte line on Wednesday dragged on and threatened a pile-up of crude in Alberta.
Supplies from OPEC face heightened uncertainty from Libya, where military commander Khalifa Haftar claimed his forces had taken control of the Sharara oilfield. The field, which has a capacity of up to 300,000 barrels a day, has been closed since December by armed residents demanding better pay and more investment in the region.
War-torn Libya was exempted from the OPEC+ alliance's agreement to reduce production. Restoring flows from Sharara “would go some way to diluting supply curbs from its OPEC peers," analysts at London-based broker PVM Oil Associates said in a note Thursday.
| Other oil-market news: |
|---|
|
--With assistance from Tsuyoshi Inajima.
To contact the reporters on this story: Alex Nussbaum in New York at anussbaum1@bloomberg.net;Grant Smith in London at gsmith52@bloomberg.net
To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, ;Simon Casey at scasey4@bloomberg.net, Carlos Caminada, Tina Davis
©2019 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
