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Oil keeps falling on signs trade talks won't bring demand relief
[SINGAPORE] Oil kept falling after its biggest weekly drop since July as signs that reaching a comprehensive US-China trade deal will be tough gave no respite from a worsening demand outlook.
Futures in New York edged lower after losing 5.5 per cent last week. Chinese officials are signalling they're increasingly reluctant to agree to a broad deal pursued by US President Donald Trump, according to people familiar with the discussions, before high-level talks between the two sides that are set to resume this week.
Oil fell for eight days through Thursday as a slew of disappointing economic data highlighted the increasing toll the trade war is taking on the global economy. Prices are now well below where they were just before the Sept 14 attacks on Saudi Arabia even amid a lack of progress in resolving tensions in the Middle East. The end of the US summer driving season is also eroding demand, with hedge fund bets on a crude rally falling to an eight-month low.
"Macro headwinds outweigh supply concerns for oil now, despite tensions in the Middle East and a reduced spare capacity pillow," Stephen Innes, an Asia-Pacific market strategist at AxiTrader, said in a note. The US-China trade talks are muddling the outlook, he said.
West Texas Intermediate (WTI) for November delivery fell 11 US cents, or 0.2 per cent, to US$52.70 a barrel on the New York Mercantile Exchange as of 10.11am in Singapore. The contract closed 0.7 per cent higher on Friday.
Brent for December settlement lost 21 US cents, or 0.4 per cent, on the London-based ICE Futures Europe Exchange. It rose 1.1 per cent on Friday, paring its weekly decline to 5.7 per cent. The global benchmark crude traded at a premium of US$5.53 to WTI for the same month.