By Heesu Lee and Alex Longley
Futures edged higher in New York on Friday, but are down about 4% this week. Chinese officials are warning they won’t budge on the most problematic issues and are wary of President Donald Trump’s impulsiveness even as the two sides get close to signing an initial agreement, people familiar with the matter said. U.S. crude inventories rose by more than forecast last week, while a JBC Energy report showed Saudi production rebounded to normal levels in October.
Ample physical oil supplies, at a time when the trade war is sapping global economic growth, are putting pressure on the Organization of Petroleum Exporting Countries and allies to reduce output further to prop up prices. However, signs that Russia is wary of more cuts may mean Saudi Arabia and other Gulf states will have to go it alone.
“Looking ahead, any price recovery faces an uphill struggle given the backdrop of rising supply and cooling demand,” PVM Oil Associates analyst Stephen Brennock wrote in a report.
West Texas Intermediate crude for December delivery rose 22 cents, or 0.4%, to $54.40 a barrel on the New York Mercantile Exchange as of 10:55 a.m. London time. Brent for January was steady at $59.73 a barrel on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a premium of $5.27 to WTI for the same month.
The “phase one” U.S.-China trade deal is designed — according to the Trump administration — to lead to a more comprehensive agreement involving more substantive economic reforms. But Chinese officials are skeptical, saying that would require the U.S. to withdraw tariffs on some $360 billion of imports from China — something many don’t see Trump being ready to do.
|Other oil-market news:|