Oil drops as market awaits news on trade talks

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    TOKYO- US oil prices fell for a second day on Tuesday, weighed down by uncertainty over whether US-China trade talks are making much progress, while higher Saudi Arabian crude output reinforced concerns about oversupply.

    US West Texas Intermediate (WTI) crude was down 18 cents, or 0.3 percent, at $56.68 a barrel. The contract dropped 0.7 percent in the previous session.

    Brent crude futures were down 14 cents, or 0.2 percent, at $62.04 a barrel, after falling 0.5 percent on Monday.

    Worries about the impact on oil demand from the fallout of the 16-month US-China trade war, which has weighed on global economic growth, have returned after doubts were cast on the chances of a so-called phase one agreement.

    US President Donald Trump said on Saturday that talks with China were moving along “very nicely” but the United States would only make a deal if it was the right one for Washington. He also there had been incorrect reporting about US willingness to lift tariffs.

    “Oil prices are struggling at the start of the week as trade concerns derail some of the momentum we saw in October that a phase one deal would deliver a boost for energy demand,” said Edward Moya, senior market strategist at OANDA.

    Caution ruled in other markets ahead of a speech by Trump to the Economic Club of New York later in the day in case there was any new word on an agreement.

    On the supply side, Saudi Arabia raised its oil output in October to 10.3 million barrels per day (bpd), although it kept its supplies to oil markets below its OPEC output target.

    The Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, will probably extend a deal to limit crude supply but are unlikely to deepen their cuts, Oman’s energy minister said. OPEC+, which has cut output by 1.2 million bpd since January under a deal set to last until March 2020, will next meet in early December. – Reuters

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