Oil prices mixed amid U.S.-China trade impasse
Oil futures were mixed on Monday, with U.S. crude edging lower, as investors and traders fretted over global economic growth prospects amid a standoff in Sino-U.S. trade talks.
U.S. West Texas Intermediate (WTI) futures were at $61.58 per barrel, down 9 cents, or 0.2% at 0223 GMT, from their previous settlement. WTI closed the last session steady on the day.
Meanwhile Brent crude futures were at $70.73 a barrel, up 11 cents, or 0.2%, from their last close. Brent ended the previous session little changed.
The trade conflict between the world’s top two economies escalated on Friday, with the United States hiking tariffs on $200 billion worth of Chinese goods after President Donald Trump said Beijing “broke the deal” by reneging on earlier commitments made during months of negotiations.
The parties appeared at a deadlock over negotiations on Sunday as Washington demanded promises of concrete changes to Chinese law and Beijing said it would not swallow any “bitter fruit” that harmed its interests.
The United States and China together accounted for 34% of global oil consumption in the first quarter of 2019, data from the International Energy Agency showed.
“The US-China trade war is set to intensify, which will limit gains in prices,” said Abhishek Kumar, head of analytics at Interfax Energy in London.
“Market participants will closely watch China’s retaliatory steps in response to the imposition of additional US tariffs on Chinese goods,” Kumar said, adding the dispute “could be particularly detrimental to the growth in global oil demand”.
Separately, in an early indicator of future output, U.S. energy companies last week reduced the number of oil rigs operating for the third time in four weeks.
Drillers cut two oil rigs in the week to May 10, bringing the total count down to 805, General Electric Co’s Baker Hughes energy services firm said in its closely followed report on Friday.
The rig count has declined over the past five months as independent exploration and production companies cut spending on new drilling.