By Barani Krishnan
Investing.com - One session is all it took for the optimism over U.S.-China trade talks to turn into pessimism.
Crude oil prices settled down 2% on Monday after a Bloomberg report that China had more demands from the Trump Administration over tariffs and wanted more talks to reach a trade deal. That contrasted with the U.S. president’s contention that the two sides were closer to an agreement.
Just on Friday, U.S. West Texas Intermediate crude U.K. Brent oil settled up more than 2% each, finishing last week up nearly 4% for their biggest weekly gain since the mid-September attack on Saudi Arabia’s oil facilities.
In the latest session, WTI settled down $1.11, or 2%, at $53.59 per barrel.
Brent closed down $1.16, or 1.9%, at $59.35.
China wants to hold more talks to hammer out the details of the “phase one” trade deal touted by President Donald Trump on Friday, before Chinese President Xi Jinping agrees to sign it, Bloomberg reported, citing people familiar with the matter.
Beijing may send a delegation led by Vice Premier Liu He, China’s top negotiator, to finalize a written deal that could be signed by the presidents at the Asia-Pacific Economic Cooperation summit next month in Chile, one of the people said. Another person said China also wants Trump to scrap a planned tariff hike in December in addition to the hike scheduled for this week, something the administration hasn’t yet endorsed.
“We were celebrating traction in the U.S.-China trade talks, but once again China did not sign the agreement and warned to keep the champagne on ice after phase one of the trade deal,” wrote Dan Flynn, a commodities analyst at Chicago’s Price Futures Group.
On Wall Street, stocks were little changed. U.S. banks are expected to open the latest quarterly reporting season with a decline of more than 1% in earnings due to falling interest rates.
The White House moved on Monday to contain the damage from the Bloomberg report, with Treasury Secretary Steve Mnuchin reassuring investors via an appearance on CNBC that that the two sides have an “understanding”.
Hu Xijin, the editor of China’s English-language mouthpiece, Global Times, also tried to downplay concerns.
“Based on what I know, China-U.S. trade talks made breakthrough last week and the two sides have the strong will to reach a final deal. Initial statement of the Chinese side is moderate,” Hu wrote on Twitter. "This is China's habit. It doesn't mean China's real attitude is not positive.”
Still, WTI hit a session low of $52.80, threatening to move below $52 and closer to the $50 support.
Brent hit an intraday bottom of $58.50 and could dip below $57, technical analysts said.