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Oil falls on jitters over US-Sino trade talks, supply glut

Oil falls on jitters over US-Sino trade talks, supply glut

Mubasher: Oil prices dropped on Monday in the midst of re-emerging fears regarding the possibility of a trade pact between the US and China and worries over supply glut, according to Reuters.

By 6:38 am GMT, US Nymex crude futures dropped by 1.07% to $56.63 per barrel (pb), while global benchmark Brent futures fell by 1.02% to $61.87 pb.

President Donald Trump on Saturday said that trade negotiations with China were going “very nicely,” yet Washington would only clinch a deal with Beijing if it was the right one for the US.

President Trump also said that “there was a lot of incorrect reporting” on the US willingness to remove tariffs, within the framework of a “Phase One” deal.

“The level of tariff lift is incorrect,” Trump said without elaborating further.

The protracted trade conflict between the world’s two leading economies and biggest oil consumers took a heavy toll on economic growth across the world, spurring downgrades to oil demand outlooks, while stoking fears of excess supplies next year.

“Oil prices are dampened by re-escalating trade uncertainties and a strengthening US dollar,” Singapore-based CMC Markets analyst Margarat Yang was quoted by Reuters.

Market outlook for next year may be tilted to the upside potential, Secretary General of the Organization of the Petroleum Exporting Countries (OPEC) Mohammad Barkindo said.

“Supply is expected to remain ample in the near term as OPEC showed it is reluctant for further cuts, while production in North America remains robust,” Yang said.

US energy firms last week scaled back the number of oil rigs for the third week running to 684, the lowest since April 2017, according to energy services company Baker Hughes.