- WTI falling at the start of the week following scepticism over what a 'phase 1' trade deal
- Bloomberg reported that China asked for more talks with the US before signing the first phase of a trade deal.
US oil is struggling in a volatile geopolitical environment, stripping value in the price of a barrel over renewed concerns over energy demand. The US benchmark, West Texas Intermediate crude is trading down by 2.35% on a spot basis having fallen from a high of $54.87 to a low of $52.76.
WTI came under pressure at the start of the week following scepticism over what a 'phase 1' trade deal between the Chinese and US would look like. Considering there had been no agreement 'inked', and only one made in principal, there was always going to be the possibility that a deal may dwindle away in further disagreements or misunderstandings on what had been agreed in principle. The details of the phase 1 deal were not released, so that too leaves the door open for scrutiny by the markets.
There were reports floating around, originating in a Bloomberg article, that China asked for more talks with the US before signing the first phase of a trade deal. The news weighed on the price of futures with crude for November delivery losing $1.72, or 3.1%, to trade at $52.98 a barrel on the New York Mercantile Exchange, paring back the majority of the 3.6% rise for last week.
Eyes on OPEC
"Downside momentum signals are still strengthening in crude, with 89% of momentum signals now pointing short while only a 10% of technical analysis signals are suggesting that we are oversold," analysts at TD Securities explained.
"Barkindo's messaging suggests that OPEC is wary of the 'catastrophic' consequences of a no deal scenario in the US-China trade talks, but it is increasingly unlikely the cartel will be able to deliver the required cuts quickly enough to prevent a loosening of conditions next year, in which case there are concerns that Saudi Arabia could have difficulty persuading allies to deepen their curtailments when the cartel meets in December."
WTI levels
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