Oil price slips amid pessimism over US-China trade deal
Fears that trade deal won’t be ready to sign in November depress already struggling market
Oil prices have dipped in early trading despite a drop in US crude inventories, with an already fragile market reacting to rumours that an interim trade deal between the US and China might not be ready to sign in November.
Brent crude prices were down 0.62 per cent at 9am GMT on October 30, at $61.22 (£47.50, €55.06) a barrel, with prices for US West Texas Intermediate (WTI) crude also down.
The fall comes despite the American Petroleum Institute (API) reporting that US crude inventories fell by 708,000 barrels the previous week. That was against analyst expectations of an increase of nearly 500,000 barrels.
The oil price stall may be a reaction to rumours that an agreement to ease the US-China trade war won’t be ready to sign by November’s Asia-Pacific Economic Cooperation summit in Chile.
A Trump administration official told Reuters, “Our goal is to sign it in Chile. But sometimes texts aren’t ready. But good progress is being made and we expect to sign the agreement in Chile.”
However, oil prices have struggled for most of the year. Earlier this week oil major BP reported a sharp fall in profits, blaming weaker global oil prices and the impact of Hurricane Barry. The market price for oil slumped to an average of $62 a barrel in the last quarter, from more than $75 a barrel a year ago.
The current market suggests oil prices will remain stubbornly low for some time, despite the efforts of the Organization of the Petroleum Exporting Countries and other producers – known as OPEC+ – to support prices. The group has cut oil output by 1.2 million barrels per day since January.