Oil price falls following US-China trade deal uncertainty
Oil prices fell by more than 2 per cent in mid-morning trading, with investors unclear as to the progress of Sino-American trade talks
The 3 per cent rise in the oil price at the end last week has been undercut since the start of trading, with investors unsure as to the outcome of US-China trade talks.
Brent crude oil futures previously closed at $60.50 a barrel but stood at $59.08 by 14:00 (GMT), a drop of around 2.25 per cent.
West Texas Intermediate (WTI) crude oil futures stood at $53.38 at the same time, a loss of $1.27 a barrel on the previous close.
Initial progress in talks between the United States and China contributed somewhat to last week’s rise in oil prices, with America announcing a suspension to this week’s planned tariff hikes. Admittedly existing tariffs remain in place.
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Oil’s gains last week can mostly be attributed to a terrorist attack on an Iranian oil tanker and the announcement that the United States will deploy almost 2,000 additional troops to Saudi Arabia.
With Turkey’s invasion of northern Syria, there are concerns that Iraq’s oil exports could be affected. Tensions in the Middle East tend to increase the oil price.
The region’s major oil producers are seemingly committed to limit global oil production. Saudi Arabia’s new energy minister recently reiterated the intention of OPEC and its allies to commit to cuts and thus keep prices relatively high. Prince Abdulaziz bin Salman is said to have observed recently that the “Oil market is not stable yet. We see the volatility.”