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Oil falls on few details on US-Sino ‘phase 1’ deal

Oil falls on few details on US-Sino ‘phase 1’ deal

Mubasher: Oil traded lower on Monday as last week’s optimism retreated due to little details on phase one trade deal between the US and China, according to Reuters.

By 7:40 am GMT, US Nymex crude futures dropped by 1.10% to $54.10 per barrel (pb), while global benchmark Brent futures fell by 1.07% to $59.86 pb.

Both benchmarks advanced by more than 3% last week, their first weekly gain in three.

“There is an argument that the oil market trading during US hours on Friday have already had a chance to price [in] the news on the trade dispute and the better outlook for global demand,” CMC Markets chief strategist Michael McCarthy was quoted by Reuters.

Nevertheless, most of the rally was fuelled by an Iranian oil vessel exploded close to Saudi Arabia’s port city of Jeddah.

Investigations were ongoing to establish whether the tanker was attacked by missiles, raising the possibility that tensions between Tehran and Riyadh could escalate if confirmed.

While the “phase one” deal clinched between the US and China, and Washington’s suspension of planned tariffs on Chinese products helped boost global financial markets, caution gripped traders with the few details from the talks.

While “traders view the deal in a tentative light [...] this baby-step agreement could take weeks to iron out,” a note by AxiTrader Asia Pacific market strategist Stephen Innes was quoted by the news agency.