Oil prices slipped for a third consecutive session on Wednesday as the prospect of the United States and China striking a trade deal in talks this week dimmed, raising uncertainties for global economic growth and oil demand.
The U.S. industry data showing a bigger-than-expected rise in stockpiles at the world’s top oil producer also depressed prices, as Brent crude futures fell 27 cents, or 0.5 per cent to $57.97 a barrel while U.S. the West Texas Intermediate crude was at $52.38, down 25 cents or 0.5 per cent.
Negotiators from the world’s top two economies will meet in Washington on Thursday and Friday in the latest effort to hammer out a deal aimed at ending a long-running trade dispute that has slowed global economic growth.
But tensions between the pair rose this week after the United States imposed visa restrictions on Chinese officials for the detention or abuse of Muslim minorities, while a row escalated over comments by a leading U.S. National Basketball Association official in support of protests in Hong Kong.
The issues have set markets on a risk-aversion course, said Howie Lee, an economist with Singapore’s OCBC bank, even though the global oil market remains in a supply deficit which should in theory support prices at above $60 a barrel.
“The market is just over-bearish at the moment, too focused on the demand side of the equation,” Lee said.
That has even overshadowed the threat of losing at least a third of Ecuador’s oil supply amid anti-government protests in the member of the Organization of the Petroleum Exporting Countries that have seriously affected oil output.
Ecuadorean state-run firm Petroamazonas estimates it could lose some 188,000 barrels per day (bpd), or more than a third of its crude production, due to unrest at its facilities.
In the United States, meanwhile, crude stockpiles rose by 4.1 million barrels in the week ended Oct. 4 to 422 million, data from industry group the American Petroleum Institute, API, showed on Tuesday. Analysts had expected an increase of 1.4 million barrels, a Reuters poll showed. [EIA/S]
The EIA said on Tuesday U.S. crude production is expected to rise by 1.27 million barrels per day (bpd) in 2019 to a record 12.26 million bpd, slightly above its previous forecast for a rise of 1.25 million bpd.
Output in 2020 is forecast to rise by 910,000 bpd to 13.17 million bpd, according to the EIA, lower than its previous estimate of a rise of 990,000 bpd to 13.23 million bpd.
Meanwhile, Saudi energy minister on Monday discussed with the Russian minister of economic development cooperation in energy and the stability of global markets, Saudi state news agency (SPA) reported.
Prince Abdulaziz bin Salman discussed with Russia’s Maxim Oreshkin “the role of the two countries in the stability of global markets through continuous coordination in this area where both sides praised the results achieved by the OPEC agreement, which helps to stabilize the oil market and the future of petroleum industries”, SPA said.