Oil prices fell as traders took profit ahead of fresh European and U.S. economic data, despite hopes for resolution to trade line that hurt global economic growth and energy demand.
Prices eased about $2 a barrel after the world’s top economies said they made improvements on trade talks. Also, U.S. officials said the deal might be signed this month.
Brent crude futures for January decreased 31 cents to $61.38 a barrel. Besides, December U.S. crude futures was at $55.91 a barrel, down 29 cents.
The European Union and the U.S. scheduled to announce manufacturing data on Monday. Besides, more U.S. and Chinese data will come later in the week.
Asia Pacific market strategist said the trade talk continues to progress sentiment. Contrarily, Asian oil traders want more convincing data from the macros side.
U.S. rig count fell for a second week in a row, and a U.S. jobs report supported oil prices last week. Independent producers decreased spending after record production weighed on the vision for energy prices.
Also, supporting U.S. crude prices was a shutdown of the Keystone pipeline that sends Canadian heavy crude to the U.S.
Production cuts by the OPEC, Russia, and other producers since January to cut oil production by 1.2 million barrels per day also propped prices.
Still, Russia again missed its production cut target in October, according to energy ministry data.
Oil Prices Fall Despite Positive China-U.S. Trade News
Oil prices decreased on Monday in Asia. It gave back some of their gains from late last week amid some positive China-U.S. trade report.
U.S. Crude Oil WTI Futures fell 0.6% to $55.88. Also, International Brent Oil Futures dropped 0.5% to $61.36.
Oil prices increased by almost 4% on Friday after data reported Chinese manufacturing orders. It surged at the most abrupt pace in more than six years.
Trade progress between China and the U.S. stayed in focus today. The two are the world’s biggest oil importers.
U.S. Trade Representative said in a statement that Robert Lighthizer and Treasury Secretary made improvements on a variety of issues. It was during a telephone call on Friday with China’s Vice Premier about a temporary trade deal.
Meanwhile, U.S. President Trump said that negotiations about a Phase One agreement were going well. Contrarily, there is skepticism about whether a full trade deal could happen.
OPEC’s production recovered in October from an eight-year low. This is after a rapid rebound in Saudi Arabia’s output from attacks on its oil infrastructure. Also, it offset losses in Ecuador and voluntary cuts under the pact.
Protests at Iraq’s main Gulf port blocked the country’s food imports. Fortunately, it did not affect the second-largest OPEC producer’s oil exports, which take place mostly from nearby offshore platforms.
Saudi Aramco kick-started its initial public offering (IPO) on Sunday. Contrarily, it offered little details on the number of shares to be sold, pricing, or the date for a launch.