LONDON: Oil prices fell, weighed down by lingering uncertainty about how close the United States and China were to a trade deal and on rising US crude inventories.
Benchmark Brent crude was down $0.92 at $61.37 a barrel by 1046 GMT after dropping more than $1 earlier in the session. Brent is on track to end the week 0.5% lower. US West Texas Intermediate (WTI) crude was down $0.87 at $56.28 a barrel.
The 16-month trade war between the world’s two biggest economies has slowed economic growth around the world and prompted analysts to lower forecasts for oil demand raising concerns that a supply glut could develop in 2020.
China’s commerce ministry said on Thursday that the two countries had agreed in the past two weeks to cancel trade tariffs in different phases without giving a timeline.
But the comment was soon shrouded in doubt after Reuters reported the plan faced stiff internal opposition in the US administration.
Oil prices have also been under pressure since OPEC Secretary-General Mohammad Barkindo said this week that he was more optimistic about the outlook for 2020, appearing to downplay any need to cut output more deeply.
A deal between the Organisation of the Petroleum Exporting Countries (OPEC) and allies, such as Russia, will limit supplies until March next year. The producers meet on December 5-6 in Vienna to review that policy.
Barkindo’s comments were “spooking the market, especially in the face of the seemingly never-ending run of US inventory builds,” said Stephen Innes, Asia-Pacific market strategist at AxiTrader.
US crude oil stockpiles rose sharply last week as refineries cut output and exports dropped, the Energy Information Administration said on Wednesday. Stocks at the Cushing, Oklahoma, delivery hub for WTI rose by 1.7 million barrels, the EIA said.