(Bloomberg) -- Oil was little changed as OPEC and its allies signaled they won't deepen output cuts and President Donald Trump signed a law supporting Hong Kong protesters, complicating trade talks with China.
Futures in New York ended Thursday stuck between $58 and $58.50 a barrel for a fourth day as the U.S. Thanksgiving Holiday reduced trading volumes.
Data presented to an OPEC committee in Vienna showed the market will be balanced in 2020 if the group maintains current output levels. Meanwhile, China said that U.S. legislation backing Hong Kong's autonomy would strain ties just as the two countries work on a trade deal. The developments came on top of a report Wednesday showing a surprise increase in U.S. crude stockpiles and record production.
“You probably have about 15% of the market expecting a deeper market cut from OPEC,” said Daniel Ghali, a TD Securities commodity strategist. “We do not expect that to happen.”
Crude prices have rebounded since dipping close to $50 a barrel in early October on signs the U.S. and China would reach a partial trade deal. But futures have been hitting a wall since nearing $59 last week, and an agreement could now be harder to reach with Beijing threatening to retaliate and saying the new law risks affecting “cooperation in important areas.”
Also see: OPEC+ Sends More Signals It'll Stick With Current Output Cuts
The Hong Kong bill signed by Trump “may have some implication on the trade file,” Ghali said. “It's not helping from a negotiating standpoint.”
West Texas Intermediate for January delivery was just 0.2% higher at $58.24 a barrel when trading halted around 1 p.m. in New York, after declining 0.5% on Wednesday. Brent for January dropped 0.3% to $63.87 on the ICE Futures Europe Exchange. The New York Mercantile Exchange was closed for the U.S. holiday, with settlement of Thursday's electronic trading slated for Friday.
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--With assistance from Ann Koh and Alex Longley.
To contact the reporter on this story: Robert Tuttle in Calgary at rtuttle@bloomberg.net
To contact the editors responsible for this story: Serene Cheong at scheong20@bloomberg.net, Carlos Caminada
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