SINGAPORE- US oil prices fell for the second straight day on Tuesday amid market jitters over limited progress between China and the United States on rolling back trade tariffs, exacerbated by a rise in US inventories.
West Texas Intermediate (WTI) crude fell 10 cents or 0.18 percent to $56.95 a barrel, falling again from an eight-week high hit last Friday when hopes for the trade deal rose.
Brent crude futures were down 12 cents, or 0.19 percent, at $62.32.
A Chinese government source was quoted by broadcaster CNBC on Monday as saying there was gloom in Beijing about prospects for a trade deal, with Chinese officials troubled by US President Donald Trump’s comment that there was no agreement on phasing out tariffs.
“We had reports overnight that the mood in Beijing was pessimistic,” said Michael McCarthy, chief market strategist at brokerage CMC Markets in Sydney. “The lack of announcement is really concerning for the demand outlook … the market is very nervous about the trade talks.”
The lingering trade battle that has seen the world’s two biggest economies impose tit-for-tat tariffs on each other has hit global growth prospects and clouded the outlook for future oil demand.
Meanwhile a preliminary Reuters poll on Monday showing US crude oil stockpile were seen rising for the fourth straight week also squeezed prices.
“Unless we get further concrete signs of global growth rally or an extension in production cuts by OPEC+ (the Organization of the Petroleum Exporting Countries and associated producers including Russia), WTI will struggle to attempt to recapture the $60-a-barrel mark,” said Edward Moya, senior market analyst at OANDA in New York.
Meanwhile, China’s record crude imports in October were matched by healthy processing rates at refineries, but even so the country still seemed to be stockpiling oil at a blistering pace.
China imported 10.72 million barrels per day (bpd) last month, up 11.5 percent from the same month in 2018 and eclipsing the previous high of 10.64 million bpd from April.
The world’s largest crude importer brought in 9.95 million bpd in the first 10 months of the year, up 10.5 percent from the same period in 2018.
But the strong growth in crude imports has largely been matched by record refinery runs, with 13.62 million bpd being processed in October, just below September’s record 13.75 million bpd.
For the first 10 months of the year, Chinese refiners processed 12.90 million bpd, up 6.4 percent from the same period in 2018.
China doesn’t provide regular data on the flow of crude into strategic and commercial storage, but an estimation can be made by looking at the total amount of crude available from imports and domestic output, and then subtracting the amount processed by refiners. – Reuters