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Oil Holds Near $57 on Glimmer of Progress in Trade War Talks


By Ann Koh and Grant Smith

(Bloomberg) Oil held near $57 a barrel in New York as China made a concession that could help resolve trade tensions with the U.S. that have weighed on the global economy and fuel demand.

Futures fell 0.9% and were more than $1 below the two-month intraday high reached on Friday. China said over the weekend it will raise penalties on violations of intellectual property rights in an attempt to address one of the key sticking points in the trade talks with Washington. The ongoing impasse has eroded economic sentiment in the world’s two biggest oil users.

Price gains since October have levelled off

Crude has rebounded since early October on signs of progress toward a limited trade deal, but prices have swung back and forth on frequent shifts in sentiment. Oil investors are growing restless as the negotiations drag on, with money managers cutting their net bets on a West Texas Intermediate rally by 13% in the week ended Nov. 19.

“The upswing being enjoyed by prices is due on the one hand to renewed optimism about an initial partial trade deal,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. “Pinning all one’s hopes on this could prove a mistake. There is still no certainty whatsoever that any deal will actually be reached in the new few weeks.”

WTI for January delivery fell 53 cents at $57.24 a barrel on the New York Mercantile Exchange as of 9:05 a.m. local time. It reached $58.74 a barrel on Friday, the highest since Sept. 23, before settling 1.4% lower.

Brent for January settlement declined 40 cents to $62.99 a barrel on the London-based ICE Futures Europe Exchange, after dropping 0.9% on Friday. The global benchmark traded at a $5.72 premium to WTI.

See also: OPEC+ May Fool Itself Into Thinking Inaction is Best: Julian Lee

China’s concession on intellectual property comes as trade negotiators have been trying to bridge the remaining differences including Beijing’s pledges to buy American farm products, protect IP rights and open its economy further to foreign companies. However, the two countries have struggled to agree on what tariffs each side would roll back as part of the agreement’s initial step.

Other market news
  • Saudi Aramco will meet investors in Abu Dhabi on Monday to drum up support for its share sale after pitching the offering in Dubai. Chief Financial Officer Khalid Al-Dabbagh on Sunday briefed potential investors on strategy and dividend plans at the Ritz-Carlton hotel in Dubai’s financial district.
  • Goldman Sachs Group Inc. said that efforts to battle climate change will support commodity prices by restricting capital flows into drilling and mining.
  • Carl Icahn plans to nominate a slate of 10 directors in an attempt to seize control of the board of U.S. oil and gas producer Occidental Petroleum Corp., according to people familiar with the matter.
  • OPEC+ and its allies postponed the date of a committee meeting by a day to Dec. 5, when it will begin two days of talks between ministers.


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