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Oil Falls on US-China Trade Concerns

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.

West Texas Intermediate graph

Brent crude LCOc1 fell 77 cents, or 1.3% to $57.58 a barrel by 1157 GMT.

West Texas Intermediate crude CLc1 was at $51.95, down 80 cents or 1.5%. Both had risen almost 1% earlier in the day.

Investors are treading cautiously before U.S.-China trade talks that take place in Washington on Thursday, although prospects for progress dimmed after President Donald Trump said a quick trade deal was unlikely.

“The market’s focus remains on trade tensions and oil demand concerns, ignoring the elevated geopolitical tensions in the Middle East and lower OPEC production in September. Growing recession risks have capped the upside of oil prices,” UBS oil analyst Giovanni Staunovo said.

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.

via Reuters [1]

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Alfonso Esparza

Alfonso Esparza [6]

Senior Currency Analyst at Market Pulse [7]
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza
Alfonso Esparza

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