Oil drops on concern over US-China trade talks progress, oversupply – Business

Oil prices fell on Monday amid new doubts about the prospects for a trade agreement between the United States and China, while concerns about excess supplies also weighed on the market.

Brent crude fell 55 cents, or 0.9 percent, to $ 61.96 at 3:50 a.m. GMT The contract rose 1.3pc last week.
US crude was 47 cents, or 0.8pc, lower at $ 56.77 per barrel, having risen 1.9pc last week.

Trump said Saturday that trade talks with China were moving "very well," but that the United States would only reach an agreement with Beijing if it were the right one for the United States.

The 16-month trade war between the two largest economies in the world has slowed economic growth worldwide and led analysts to reduce oil demand forecasts, raising concerns that an excess may develop. Offer in 2020.

Trump also said there were incorrect reports about the United States' willingness to raise tariffs as part of a "phase one" agreement, whose news had boosted the markets.

Underlining the impact of the trade war, weekend data showed that Chinese producer prices fell more in more than three years in October, as the manufacturing sector weakened, hit by the dispute and the decline in demand.

"Oil prices are affected by rising trade uncertainties and strengthening the US dollar," said Margarat Yang, a market analyst at CMC Markets in Singapore.

"The offer is expected to remain wide in the short term, as the Organization of Petroleum Exporting Countries (OPEC) showed that it is reluctant to further cuts, while production in North America remains strong," he added.

The oil market outlook for next year may have bullish potential, OPEC Secretary General Mohammad Barkindo said last week, suggesting that there is no need to further reduce production.

OPEC and its Russian-led allies meet in December. The so-called Opec + alliance, which seeks to increase oil prices, has reduced production by 1.2 million barrels per day from January to March 2020.

Money managers increased their long net futures and oil options positions in the United States in the week to November 5 by 22,512 contracts to 138,389, the US Commodity Futures Trading Commission said.

In the United States, energy companies reduced the amount of oil platforms operating for the third consecutive week last week. Drillers cut seven platforms in the week through November 8, reducing the total bill to 684, the lowest since April 2017, Baker Hughes said.