Oil kept falling after its biggest weekly drop since July as signs that reaching a comprehensive U.S.-China trade deal will be tough gave no respite from a worsening demand outlook.
Futures in New York edged lower after losing 5.5% last week. Chinese officials are signaling they’re increasingly reluctant to agree to a broad deal pursued by President Donald Trump, according to people familiar with the discussions, before high-level talks between the two sides that are set to resume this week.
Oil fell for eight days through Thursday as a slew of disappointing economic data highlighted the increasing toll the trade war is taking on the global economy. Prices are now well below where they were just before the Sept. 14 attacks on Saudi Arabia even amid a lack of progress in resolving tensions in the Middle East. The end of the U.S. summer driving season is also eroding demand, with hedge fund bets on a crude rally falling to an eight-month low.
“Macro headwinds outweigh supply concerns for oil now, despite tensions in the Middle East and a reduced spare capacity pillow,” Stephen Innes, an Asia-Pacific market strategist at AxiTrader, said in a note. The U.S.-China trade talks are muddling the outlook, he said.
West Texas Intermediate for November delivery fell 15 cents, or 0.3%, to $52.66 a barrel on the New York Mercantile Exchange as of 11:31 a.m. in Singapore. The contract closed 0.7% higher on Friday.
Brent for December settlement lost 26 cents or 0.5% to $58.11 a barrel on the London-based ICE Futures Europe Exchange. It rose 1.1% Friday, paring its weekly decline to 5.7%. The global benchmark crude traded at a premium of $5.51 to WTI for the same month.
Senior Chinese officials have indicated in meetings with U.S. visitors to Beijing in recent weeks that the range of topics they’re willing to discuss has narrowed considerably, the people familiar with the discussions said. It’s emblematic of what analysts see as China’s strengthening hand as the Trump administration faces an impeachment crisis.
