Oil dips in Asia on waning trade optimism

Oil prices on both sides of the Atlantic are flashing red amid warning US-China trade optimism and the resulting risk-off tone in the global markets.

At press time, a barrel of Brent is changing hands at $62.20, representing a 0.35% drop on the day. WTI is also trading in the red at $56.90 per barrel.

The losses could be associated with reports stating that the phase one" U.S.-China trade deal could slip into next year.

Some observers are worried that trade talks may fall apart due to the renewed political tensions between the US and China. The world's second-largest economy on Wednesday condemned a US Senate bill aimed at protecting human rights in Hong Kong. Meanwhile, US President Donald Trump said he is inclined to raise tariffs on Chinese imports if a trade deal is not reached.

As a result, the risk has come under pressure in Asia. The futures on the S&P 500 are currently reporting a 0.10% drop. The index fell by 0.38% on Wednesday. Stocks in Asia are also losing ground with Japan's Nikkei shedding 1.15% and the Shanghai Composite reporting a 0.20% drop.

China's Vice Premier Liu He was out on the wires a few minutes before press time stating that he is cautiously optimistic about reaching a trade deal. USD/JPY has bounced up more than 20 pips on Liu He's comments, however, equities continue to operate on slippery grounds.

Oil, therefore, is struggling to extend Wednesday's 3% gain. The black gold picked up a strong bid during the US trading hours on Wednesday after official data showed crude inventories in the United States increased by 1.4 million barrels for the week ending Nov. 15, less than the 1.6 million barrels analysts surveyed by S&P Global Platts.

Brent technical levels