Crude Surrenders Gains as Trade Talks Loom, Demand Woes Deepen
Oil Keeps Falling on Signs Trade Talks Won’t Bring Demand Relief
(Bloomberg) -- Oil surrendered the biggest gains in more than two weeks amid conflicting signals about economic growth, energy demand and geopolitical stability.
Futures settled little changed in New York on Monday. At one point during the session, crude climbed $1.25 a barrel, presenting explorers with an opportunity to lock in prices for future output through hedges.
Just days ahead of highly-anticipated trade talks between the world’s two largest economies, Chinese officials signaled reluctance to address some of U.S. President Donald Trump’s primary themes. Separately, Trump threatened to “destroy and obliterate” Turkey’s economy if Ankara takes unspecified “off limits” actions in neighboring Syria.
“The market has kind of taken a bearish tone on fears that the economy will weaken,” said Bill O’Grady, chief market strategist at Confluence Investment Management LLC in St. Louis. “That has become the dominant narrative.”
Crude prices also were under pressure because of reports that Saudi Arabia has restored its crude production little more than three weeks after crippling aerial attacks, said Michael Loewen, director of commodity strategy at Scotia Bank.
West Texas Intermediate for November delivery slipped 6 cents to close at $52.75 a barrel on the New York Mercantile Exchange.
Brent for December settlement closed down 2 cents to $58.35 on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a premium of $5.64 to WTI for the same month.
“I think the upcoming trade negotiations are injecting some positive momentum. The bar for success is being set very low still,” said Ashley Petersen, a senior oil market analyst at Stratas Advisors in Houston.
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--With assistance from Alex Longley and Catherine Ngai.
To contact the reporters on this story: Jacquelyn Melinek in New York at jmelinek@bloomberg.net;Sheela Tobben in New York at vtobben@bloomberg.net
To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Joe Carroll, Catherine Traywick
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