Yahoo Finance Oil Price Fall amid Fears over China Trade War Slowdown
Investing.com - Oil prices extended early losses on Monday as weak Chinese export data added to fears over the impact of the Sino-U.S. trade war on the world’s second largest economy.
Brent futures were down 55 cents, or 0.8%, at $63.84 per barrel by 08:22 AM ET (12:22 GMT), after gaining about 3% last week after the Organization of the Petroleum Exporting Countries and associated producers including Russia, a group known as OPEC+ agreed to deepen output curbs.
West Texas Intermediate oil futures were down 56 cents, or 0.9% to $58.64 a barrel, having risen about 7% last week.
The falls came after data on Sunday showed that Chinese exports fell for a fourth straight month in November, underlining worries over the impact on the global economy from the protracted U.S.-China trade conflict.
The drop in exports overshadowed another report showing that China’s crude oil imports hit a record high on a daily basis in November, revealing the depths of the concern in markets over the trade row that has stymied global growth and oil demand.
"China is clearly not immune to either the U.S. trade tariffs, or the lingering slowdown in the broader global economy," said Jeffrey Halley, senior market analyst at OANDA.
Washington and Beijing have been trying to agree a trade deal that will end tit-for-tat tariffs, but talks have dragged on for months as they wrangle over key details.
Beijing hopes an agreement with the United States can be reached as soon as possible, China's Assistant Commerce Minister Ren Hongbin said on Monday. However, top White House economic adviser Larry Kudlow said on Friday the Dec. 15 deadline for the U.S. to impose a new round of tariffs on China was still in place.
Monday’s price falls put an end to a strong run in previous sessions fueled by hopes for the OPEC+ production curb deal.
On Friday, those producers agreed to deepen their output cuts from 1.2 million barrels per day (bpd) to 1.7 million bpd, representing about 1.7% of global production.
"This decision crystallizes an important shift in strategy to managing short-term physical imbalances rather than trying to correct perceived long-term imbalances through open-ended commitments," Goldman Sachs said in a note.
Still, U.S. production has surged since the OPEC+ cuts were first introduced in 2017 in an attempt to drain a supply glut that had long weighed on prices. U.S. output has risen even as the drill count has fallen, reflecting more efficient well extraction.
Energy services firm Baker Hughes said in its closely watched weekly drilling report on Friday that the U.S. drill count fell in the week to Dec. 6 - a seventh week of decline.
--Reuters contributed to this report
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