Source: Reuters
NEW YORK (Reuters) – Oil prices eased on Monday after four days of gains as worries about weak Chinese industrial data offset hopes oil demand will rise as talks progress on a Sino-American trade deal.
Brent futures were down 32 cents, or 0.5%, at $61.70 a barrel by 11:39 a.m. EDT (1539 GMT), while U.S. West Texas Intermediate (WTI) fell 57 cents, or 1.0%, to $56.09.
Earlier in the session, Brent and WTI rose to their highest levels in a month, hitting $62.34 and $56.92 per barrel, respectively. WTI fell after failing to break above its 200-day moving average.
Profits at Chinese industrial companies fell for the second straight month in September as producer prices continued to slide, highlighting the impact of a slowing economy and protracted U.S. trade war on corporate balance sheets.
That data was partially offset by comments by U.S. President Donald Trump that he expected to sign a significant part of a trade deal with China ahead of schedule but did not elaborate on the timing.
“We are looking probably to be ahead of schedule to sign a very big portion of the China deal, we’ll call it Phase One but it’s a very big portion,” he told reporters.
The news comes as a relief to investors who have been grappling with the fallout from the trade war and its impact on the global economy. Analysts say an agreement would provide a boost to global oil demand.
“Looking further ahead, if trade talks continue to progress, and we see full agreement to phase 1 of the deal, this should help to improve sentiment further,” ING analyst Warren Patterson said.
(Graphic: U.S. Rig count, here)
Russia’s energy ministry said that the Organization of the Petroleum Exporting Countries and its oil-exporting allies, known as OPEC+, would factor in any slowdown of U.S. oil output growth when they meet to discuss their output agreement in December.
However, Russian Deputy Energy Minister Pavel Sorokin said it was premature to talk about deeper production cuts.
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U.S. crude output has surged to records above 12 million barrels per day this year thanks to gains from the Permian basin, that have made the United States the world’s largest producer ahead of Saudi Arabia and Russia.
The rate of growth has, however, been tempered as U.S. energy companies reduced the number of oil rigs in October for a record 11 months, under pressure from investors to cut spending on new drilling.
