Published: Sat, November 16, 2019
Markets | By Otis Pena

China trade war sees oil rises further above $62

China trade war sees oil rises further above $62

Still, traders have a lot to be bullish about: all indications are that the dispute between the USA and China will soon be resolved, and many analysts think the Organization of the Petroleum Exporting Countries (OPEC) will extend its output caps and perhaps even deepen them when the cartel meets next month, to compensate for a perceived global weakening of demand.

President Donald Trump had stated that the negotiations with China were moving very positively.

US crude value on the other hand, reached 63 cents, a fall of 1.1 per cent at a value of Dollars 56.61 per barrel, with a rise of 1.9 per cent in the preceding week.

Given that inventory rates was the driver of trading on Tuesday, prices may drop further in coming sessions if a speculative forecast ahead of government data due on Thursday proves correct and stockpiles across the US rose last week for a third week in a row.

Oil prices were down early on Monday, as global markets brace for protracted talks in the U.S.

Oil fell for a third day amid fading momentum in trade talks between the US and China, and signs of another increase in American crude stockpiles. President Donald Trump's speech in NY on Tuesday disappointed investors, giving little insight on how the impasse with Beijing will be resolved, and warning of higher tariffs if a deal can't be reached. He said there had been incorrect reporting about United States willingness to lift tariffs.

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Cushing inventories had grown for five weeks in a row through November 1, according to government data. The country's crude oil output hit a record 13 million bpd this month and will grow more than expected in 2019 and 2020, the U.S. Energy Information Administration said in a forecast issued on Wednesday.

Oman, one of the outside producers working with OPEC, said on Monday that the alliance will probably extend the agreement but are unlikely to increase the size of the supply cut. The contract dropped 0.7 per cent in the previous session.

Last week was ugly for the market "between China and Keystone misinformation and I think it has thrown many off the bear trade on the WTI spreads ... since we have 48 million barrels in tank and delivered crude for sale that no one wants to run", said Shelton.

Opec+, which has since January cut output by 1.2 million bpd under a deal set to last until March 2020, will next meet in early December.

Even as production growth in the United States slows from breakneck pace of recent years, the world's top oil producer will still account for 85% of the increase in global oil production to 2030, and for 30% of the increase in gas, the agency said.

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