This Article is From Oct 15, 2019

Crude Declines as U.S.-China Trade Deal Optimism Vanishes

Jacquelyn Melinek
Markets
Oct 15, 2019 07:38 am IST
- Published On Oct 15, 2019 07:37 am IST
- Last Updated On Oct 15, 2019 07:38 am IST

Read Time: 3 mins

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(Bloomberg) -- Oil dropped the most in two weeks amid concern that the recent U.S.-China trade talks won't lead to a deal.

Futures in New York slid 2% on Monday. Washington and Beijing made several concessions to reach a partial trade deal last week, but China said it wants to hold further talks this month to hammer out details of the “phase one” agreement touted by U.S. President Donald Trump.

“The bearish impetus came from talks that the U.S.-China trade deal might not come forward,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts.

Despite threats to oil supply in recent months -- including an attack on Saudi Arabia's oil facilities -- investors are focused on the uncertainty around trade talks and a weak global demand outlook.

WTI for November delivery dropped $1.11 to settle at $53.59 a barrel on the New York Mercantile Exchange. Prices rose 3.6% last week.

Brent crude for December settlement slid $1.16 to end the session at $59.35 a barrel on the ICE Futures Europe Exchange. The global benchmark traded at a premium of $5.70 a barrel to WTI for the same month.

China also wants Trump to scrap a planned tariff hike in December in addition to the hike scheduled for this week, something the administration hasn't yet endorsed, according to a person familiar with the matter.

It looks like China is trying to negotiate some terms and what led prices to rise Friday “isn't headline worthy today,” says Thomas Finlon, director of Energy Analytics Group in Wellington, Florida.

Other oil-market news
Gasoline futures fell 1.6% to settle at $1.6132 a gallon. Saudi Aramco said it's restored most of its oil output capacity and is currently pumping 9.9 million barrels a day, the same as before the Sept. 14 attacks. The cost of hiring oil tankers is running out of control and the world's refineries are feeling the pain. Nothing right now is stopping a surge in oil tanker rates that's given owners of the vessels one of the biggest boosts in years.

Other oil-market news

Gasoline futures fell 1.6% to settle at $1.6132 a gallon.
Saudi Aramco said it's restored most of its oil output capacity and is currently pumping 9.9 million barrels a day, the same as before the Sept. 14 attacks.
The cost of hiring oil tankers is running out of control and the world's refineries are feeling the pain.
Nothing right now is stopping a surge in oil tanker rates that's given owners of the vessels one of the biggest boosts in years.

--With assistance from James Thornhill, Elizabeth Low and Grant Smith.

To contact the reporter on this story: Jacquelyn Melinek in New York at jmelinek@bloomberg.net

To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Jessica Summers, Mike Jeffers

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