Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Oil Dips on China Worries; OPEC Deal Not out of Woods

Published 12/09/2019, 01:25 PM
Updated 12/09/2019, 03:22 PM
© Reuters.

© Reuters.

Investing.com - Markets may have the rest of the week to wait out a possible China-U.S. deal, but weak Chinese exports data are already giving investors an ominous feeling, sending oil prices lower on Monday.

Crude futures were down almost from start to close in New York, not gaining any inspiration from Friday’s outperformance where the U.S. oil benchmark gained more than 7% on the week on deeper output cuts pledged by world oil producers. Stupendous U.S. jobs data for November, released Friday, added to the oil rally.

U.S. West Texas Intermediate crude settled down 18 cents, or 0.3%, at $59.02 per barrel by 3:08 PM ET (20:08 GMT). It reached a five-month high of $59.84 on Friday, just cents short of the $60 level much sought by oil bulls.

U.K. Brent, the global benchmark for crude, closed New York trading down 14 cents, or 0.2%, at $64.25. It hit a three-month high of $64.88 on Friday.

Saudi Arabia, Russia and other oil producers banded under the OPEC+ alliance agreed in Vienna on Friday to reduce daily output by a total of 2.1 million barrels, or 2.1% of world supply, over the first quarter of next year.

Yet oil prices fell on Monday after data showed Chinese exports declined for a fourth-straight month, sending jitters through a market already concerned about damage to global demand by the trade war between Washington and Beijing. Unless a trade deal is signed by Dec. 15, the Trump administration is set to raise tariffs further on Chinese imports.

Customs data released on Sunday showed exports from China in November fell 1.1% from a year earlier, confounding expectations for a 1% rise in a Reuters poll. “China is clearly not immune to either the U.S. trade tariffs, or the lingering slowdown in the broader global economy,” said Jeffrey Halley, senior market analyst at OANDA.

Analysts were also skeptical about the OPEC+ deal.

“We think that the net impact on real supplies will be limited and depends too much on Iraq making very sharp cuts to its production,” said Olivier Jakob of oil risk consultancy PetroMatrix said. Iraq has been OPEC’s most errant member on production accords.

OPEC will release on Wednesday its monthly oil report, followed by the more important International Energy Agency (IEA) report on global supply-demand.

“It will be interesting to see the IEA read of the impact of the new OPEC deal on the global supply and demand," Jakob said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.