By Adedapo Adesanya
Crude oil prices were hit on Monday as data from China reflected the impact of the 17th-month long trade war with the United States on its exports.
There is no doubt that the trade spat between both countries had affected oil demand and which in turn affected prices. It has also affected exports and imports as a result of tariffs placed on goods.
Following this, Brent crude, the international benchmark, which traded close to $65 per barrel last week, fell by 0.31 percent or 20 Cents to trade at $64.19 per barrel.
Likewise, the US West Texas Intermediate (WTI) crude lost 0.34 percent equivalent to 21 Cents to close at $59 per barrel.
The customs data released on Sunday showed exports from China in November fell 1.1 percent from a year earlier to $221.7 billion as this would be the 12th straight month China has seen a drop in exports to the US because of the trade war impact.
China’s Assistant Commerce Minister Ren Hongbin said on Monday that there are hopes that China can reach an agreement with their warring partner but the US aren’t looking to budge anytime soon with President Donald Trump saying that he might have to wait till the next year elections in November before making a move.
This really affected projections for a better oil price following the decision reached at the meeting of the producers and allies of the Organisation of the Petroleum Exporting Countries (OPEC) on Friday to cut oil output by a further 500,000 barrels per day from 1.2 million to 1.7 million bpd.
With the oil cut expected to run till March next year, 2020 is looking like a good year for oil prices with Brent Crude projected to reach $70 per barrel by the second quarter of the year despite competition expected from Non-OPEC members – Norway and Brazil while also considering rising US shale production.
Dipo Olowookere