Mubasher: Oil prices fell on Thursday amid expectations that the trade talks between the US and China, due to resume this week, would not end in a resolution to a protracted conflict between the world’s two biggest crude importers, according to Reuters.

By 8:03 am GMT, US Nymex crude futures dropped by 0.63% to $52.26 per barrel (pb), while international benchmark Brent futures fell by 0.53% to $58.01 pb.

Both contracts dropped by more than 20% from highs seen last April.

China was less expecting a deal from the bilateral talks on Thursday and Friday to head off US President Donald Trump’s planned hike to the tariff rate on around $250 billion of Chinese goods to 30% from 25% on 15 October, if no progress in the talks is made.

The prolonged trade war has disrupted global supply chains, threw a wrench into growth for the world’s biggest two economies, weighing on fuel consumption in both.

“Should US-China trade negotiations take a turn for the worse, market pessimism will impose sharp negative pressures on oil prices, Singapore-based Phillip Futures commodities analyst Benjamin Lu was quoted by Reuters.

On the supply front, prices were pressured by the Energy Information Administration’s (EIA) weekly report showing a build-up of 2.9 million barrels in the US crude inventories last week.

Outside the US, the Organization of the Petroleum Exporting Countries (OPEC) modified its supply-cutting deal to allow Nigeria to ramp up its output.

Furthermore, OPEC member Venezuela would also raise its exports despite US sanctions which limited its shipments, with India’s refinery Reliance Industries due to start loading crude barrels from the Latin American nation, after four-month halt.