Mubasher: Oil prices fell on Friday amid uncertainty pertaining to the chances and time of the long-awaited deal between the US and China to end their crippling trade conflict, Reuters said.
The gloom was further accentuated by a buildup in the crude oil stockpiles in the US last week.
By 9:13 am GMT, US Nymex crude futures dropped by 0.98% to $56.59 per barrel (pb), while global benchmark Brent futures fell by 0.75% to $61.82 pb.
Both Nymex and Brent were still on track for weekly gains of 0.8% and 0.4%.
Beijing and Washington agreed during the past two weeks to roll back some existing trade tariffs in tranches, as per announced by the Chinese Commerce Ministry.
However, apart from the scant details, doubts popped up once again following a report by Reuters that the plan faced fierce internal opposition at the White House.
The trade conflict between the world’s two top economies and oil consumers pulled down economic growth worldwide, leading economists to cut their forecasts for fuel demand, amid fears of an incoming supply glut next year.
Furthermore, Secretary General of the Organization of the Petroleum Exporting Countries (OPEC) Mohammad Barkindo voiced optimism over the outlook for next year, citing positive developments in the trade disputes, seemingly downplaying the necessity of steeper supply restraints.
Barkindo’s remarks sent a shudder of fear among market participants, “especially in the face of the seemingly never-ending run of US inventory builds,” AxiTrader Asia Pacific market strategist Stephen Innes was quoted by Reuters.
In the US, crude oil inventories rose sharply last week as refiners reduced production levels and exports fell, while refined products continued their multi-week falling trend, the Energy Information Administration (EIA) said.