3 weeks ago
Forex

Oil Prices Decline Despite Positive U.S.-China Trade News

Investing.com - Oil price fell on Monday in Asia even after the U.S. and China moved closer to a potential

Investing.com - Oil price fell on Monday in Asia even after the U.S. and China moved closer to a potential trade deal.

On Sunday, U.S. President Donald Trump announced on Twitter that he is delaying a hike in tariffs on Chinese goods, citing progress in the latest trade talks between the two sides. The President added that if progress continued, he and his Chinese counterpart Xi Jinping would seal a deal.

Trump’s tweet boosted Asian equities in morning trade, with Chinese stocks jumped about 4%. However, oil prices were little impacted by the news.

U.S. Crude Oil WTI Futures was down 0.4% to $57.05 by 11:03 PM ET (04:03 GMT). On Friday, WTI rose to its strongest level since Nov. 16 at $57.81 and gained about 3% for the week.

International Brent Oil Futures also slipped 0.4% to $57.05. It touched a more than three-month high of $67.73 on Friday and saw a gain of about 1.3% on the week.

Despite today’s fall, oil prices have rallied approximately 25% since the beginning of 2019. Hopes that the U.S. and China, the world’s two largest oil-consuming nations, would hammer out a trade agreement was cited as one of the major tailwinds for oil prices.

Meanwhile, oil prices were also boosted by efforts by global producers to cut supply.

In December, OPEC and a group of 10 producers outside the cartel, led by Russia, agreed to collectively cut production by a total of 1.2 million barrels per day (bpd) during the first six months of 2019.

Top exporter and OPEC's de-facto leader Saudi Arabia recently pledged to cut even more production than the deal called for.

In other news, recent comments by Russell Hardy, Chief Executive Officer (CEO) of the world’s largest energy trader, Vitol Group, received some attention as he said "oil supply is going to be pretty tight until the third quarter."

"The OPEC decision has meant there’s less available, the Iranian situation has meant there’s less available, and the Venezuelan situation now is adding to that,” Hardy told Bloomberg in an interview.

"There could be a question mark over market direction by the fourth quarter of this year."