Crude Oil Price: US-China Trade Fears Capping Crude Oil For Now

Galtero Lara
Febrero 11, 2019

-China trade talks overshadowed support from OPEC-led supply restraint.

Oil prices fell on Monday as an uptick in USA drilling and concerns about demand due to the slow progress in U.S.

An oil pump jack pumps oil in a field near Calgary, Alberta, Canada on July 21, 2014.

Benchmark Brent oil fell 16 cents or 0.26 percent to $61.94 a barrel at 1220 GMT.

U.S. West Texas Intermediate (WTI) crude fell 41 cents or 0.78 percent to $52.31.

Escalating U.S. -China trade tensions have cost both countries billions of dollars and disrupted global trade and business flows, roiling financial markets.

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"At the same time, it has to be argued that a lot of the economic data that has been released over the last few days has really not been too encouraging, and U.S".

According to traders who spoke to Reuters, prices of the U.S. Mars grade and of sour grades from Latin America like Colombia's Castilla have jumped as interest has also significantly increased after the United States announced sweeping sanctions on Venezuela's oil sector at the end of January.

Traders are also saying that a fire at an IL refinery is limiting demand for WTI crude oil because of the shutdown of a large crude distillation unit. The US delegation has already arrived in Beijing today for pre-negotiations ahead of the key meeting on the trade talks on February, 14 and 15.

However, over the last hour, the black gold is seen making some minor recovery attempts on the back of an improvement in the appetite for the risk assets such as oil, equities etc, as the European traders remain optimistic over the progress on the US-China trade front. This cast a shadow as the two countries try to reach a deal before the March 1 deadline when USA tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent.

Still, oil prices have been buoyed this year by output curbs from the Organization of the Petroleum Exporting Countries and its allies, including Russian Federation, a group known as OPEC+.

US sanctions on Venezuela, along with older sanctions on fellow OPEC member Iran, have also prevented crude prices from falling further.

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