Crude Oil Prices Monitoring Global Trade War
We noticed a rise in world crude oil prices early this week, before Monday's trading closed slightly lower, as investors focused on the US-China trade negotiations round scheduled to resume next Thursday. Chinese Vice Premier Liu is scheduled to meet US Trade Representative Robert Lightzer and Treasury Secretary Stephen Mnuchin in Washington. The gains were also supported by data showing that OPEC production fell in September. In terms of trading, the price of West Texas crude fell to the level of $52.75 a barrel, after rising to $54.06 at the beginning of Monday's session. On Friday, WTI crude futures closed up $0.36 to $52.81 a barrel, after a series of eight-day losses. It suffered a weekly decline of 5.5% - the largest since the week ending July 19. Brent crude fell to $58.35 a barrel. Brent crude fell 4.4% last week.
Before the round of talks, US President Donald Trump said his administration had a "very good chance" of agreeing a trade deal with China. Meanwhile, the Bloomberg report, citing people familiar with the talks, said Chinese officials are reluctant to approve a comprehensive trade deal under the Trump administration.
Oil investors have reacted to reports of protests in Iraq, where more than 100 protesters have been killed and more than 6,000 wounded, while the government has rushed to contain popular anger in Baghdad and several southern cities since Tuesday. According to a survey by S&P Global Platts, OPEC crude production fell by 1.48 million barrels per day to 28.45 million barrels per day in September. This was the biggest monthly decline in nearly 17 years.
The planned talks between the United States and China over the weekend will help determine the outlook for energy demand. White House economic adviser Larry Kudlow told reporters he was optimistic that trade officials from the United States and China would make progress and an agreement could be reached, and that the United States was open to a short-term deal as long as "structural issues" were addressed.
According to Baker Hughes, the US oilfield services company, the number of US oil platforms fell for the seventh week in a row, down by 3 to 710 last week. This reinforces the prospect of a stagnant US oil production as investment in the sector declines.