Oil falls as worries over US-China trade talks build
Unrest in Iraq and Ecuador lends some support to crude price
Unrest in Iraq and Ecuador lends some support to crude price. PHOTO:REUTERS
LONDON:
Oil prices fell on Tuesday as Washington's blacklisting of more Chinese companies dampened hopes for a trade deal between the two countries, though unrest in Iraq and Ecuador lent some support to crude prices.
Brent crude fell $0.19 to $58.16 a barrel by 1035 GMT. US West Texas Intermediate crude was at $52.48, down $0.27. Both had risen almost 1% earlier in the day.
Investors are treading cautiously before US-China trade talks that will take place in Washington on Thursday, although prospects for progress dimmed after Washington blacklisted more Chinese firms and President Donald Trump said a quick trade deal was unlikely.
"It is impossible to predict the outcome of talks. Anything seems possible - from a partial agreement to another truce or indeed a complete breakdown of the talks. The spectrum of potential price reactions is correspondingly large," said Commerzbank analyst Carsten Fritsch.
Hedge funds sold petroleum futures and options for a second week running as a price bounce after attacks last month on Saudi oil facilities evaporated, and attention shifted to a deteriorating global economy.
Saudi oil production was temporarily reduced by the attacks. Riyadh said last week it had fully restored output.
In the United States, crude inventories are expected to have grown for a fourth week while distillates and gasoline stocks likely fell, a Reuters poll showed on Monday.
However, protests in Organisation of the Petroleum Exporting Countries (OPEC) members Iraq and Ecuador threatened to disrupt their oil output and supported prices.
The death toll in Iraq, the second-largest producer in OPEC, has climbed after a week of unrest.
"Unrest in Iraq gained a high profile at the start of October as a result of large protests in Baghdad," Royal Bank of Canada (RBC)analyst Al Stanton said.
He said potential attacks by Turkey on Kurdish forces in northeast Syria could take place close to the Iraqi border, leading to "a refugee crisis that puts pressure on Kurdistan's economy" and its oil production.
Turkey said it had completed preparations for a military operation in northeast Syria after the United States began pulling back troops.
The energy ministry in Ecuador, one of OPEC's smallest producers which is quitting the group next year, said protests against austerity could reduce its oil output by 59,450 barrels per day.
Ecuador's state-run oil company Petroamazonas EP suspended operations at three oilfields in the Amazon region on Monday.
Oil prices fell on Tuesday as Washington's blacklisting of more Chinese companies dampened hopes for a trade deal between the two countries, though unrest in Iraq and Ecuador lent some support to crude prices.
Brent crude fell $0.19 to $58.16 a barrel by 1035 GMT. US West Texas Intermediate crude was at $52.48, down $0.27. Both had risen almost 1% earlier in the day.
Investors are treading cautiously before US-China trade talks that will take place in Washington on Thursday, although prospects for progress dimmed after Washington blacklisted more Chinese firms and President Donald Trump said a quick trade deal was unlikely.
"It is impossible to predict the outcome of talks. Anything seems possible - from a partial agreement to another truce or indeed a complete breakdown of the talks. The spectrum of potential price reactions is correspondingly large," said Commerzbank analyst Carsten Fritsch.
Hedge funds sold petroleum futures and options for a second week running as a price bounce after attacks last month on Saudi oil facilities evaporated, and attention shifted to a deteriorating global economy.
Saudi oil production was temporarily reduced by the attacks. Riyadh said last week it had fully restored output.
In the United States, crude inventories are expected to have grown for a fourth week while distillates and gasoline stocks likely fell, a Reuters poll showed on Monday.
However, protests in Organisation of the Petroleum Exporting Countries (OPEC) members Iraq and Ecuador threatened to disrupt their oil output and supported prices.
The death toll in Iraq, the second-largest producer in OPEC, has climbed after a week of unrest.
"Unrest in Iraq gained a high profile at the start of October as a result of large protests in Baghdad," Royal Bank of Canada (RBC)analyst Al Stanton said.
He said potential attacks by Turkey on Kurdish forces in northeast Syria could take place close to the Iraqi border, leading to "a refugee crisis that puts pressure on Kurdistan's economy" and its oil production.
Turkey said it had completed preparations for a military operation in northeast Syria after the United States began pulling back troops.
The energy ministry in Ecuador, one of OPEC's smallest producers which is quitting the group next year, said protests against austerity could reduce its oil output by 59,450 barrels per day.
Ecuador's state-run oil company Petroamazonas EP suspended operations at three oilfields in the Amazon region on Monday.