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Oil prices slip as demand concerns outweigh US-China trade optimism
OIL prices edged lower on Tuesday as lingering worries over a global economic slowdown that could hurt demand offset some signs of progress in US-China trade talks.
Brent crude oil futures were down 10 cents, or 0.2 per cent, at US$58.86 a barrel by 0704 GMT, while US West Texas Intermediate (WTI) crude futures were down 12 cents, or 0.2 per cent, at US$53.19 per barrel.
US President Donald Trump on Monday said efforts to end a US trade war with China were going well as negotiators from the two countries work to nail down a Phase 1 trade deal text for their leaders to sign next month when they meet at November's Apec summit.
"Commodity markets were cautiously optimistic amid signs that a trade deal was close to being signed by the United States and China," ANZ bank said in a note.
"Crude oil prices remained in the doldrums, with ongoing economic weakness weighing on sentiment," it added.
Brent has fallen 22 per cent from its April peak, while WTI is down 20 per cent.
Goldman Sachs on Tuesday trimmed its 2020 global oil demand growth forecast to 1.3 million barrels per day (bpd), from 1.4 million bpd previously. It also wound back its forecast for growth in US shale output in 2020 to 0.7 million bpd in 2020 versus a previous forecast of one million bpd.
Although there are some signs of easing tensions between the world's two largest economies, US Commerce Secretary Wilbur Ross said on Monday that an initial trade deal does not need to be finalised next month, emphasising the need to get the right deal.
Adding to tensions, China is seeking US$2.4 billion in retaliatory sanctions against the US for non-compliance with a WTO ruling in a tariffs case dating back to the era of President Barack Obama.
"In the short term, a possibility of the United States and China signing an initial deal could support prices, but it remains to be seen whether tariffs set for December will be removed," said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul. REUTERS