By Adedapo Adesanya
The Brent crude dropped below $65 at the global market on Monday, extending losses brought about by the ease in tension between the United States and Iran last week.
Brent crude, the international benchmark, which had shed over 4 percent in total since the announcement of no attack by the US, further depreciated by 1.42 percent equivalent to 89 cents to trade at $64.20 per barrel on Monday night.
Also last night, the United States West Texas Intermediate (WTI) crude further moved down below $60, shedding 1.63 percent or 96 cents to trade at $58.08 per barrel.
This performance means that prices of the commodity have fallen for the fifth consecutive session by Monday, with the US benchmark logging its lowest finish in almost six weeks.
Oil prices surged to their highest in almost four months after a US military strike killed the Iranian commander, General Qasem Soleimani, on January 3 and Iran retaliated with missiles launched against US bases in Iraq.
But for now, the outcome has not caused any major threat to supply. So, they have continued to slump especially since President Donald Trump of the US retreated from escalating direct conflict last week.
Also pulling prices further down was the rise in US crude inventories, which moved up unexpectedly last week, with stockpiles climbing 1.2 million barrels to 431.1 million barrels.
Meanwhile, the US-China trade pact will see both parties meet on Wednesday, January 15. Reports show that the Trump administration has invited at least 200 people to a ceremony for the signing, but the two nations have not yet finalised full details of what will be signed.
Ahead of the signing, the US stripped away its designation of China as a currency manipulator on Monday and instead placed the country’s along with nine other trading partners like Germany, Italy, Japan, Korea and Vietnam on a monitoring list.
Some details on the signing trade deal, according to analysts, mean China would greatly increase its purchases of US farm goods and other products, further open its financial sector, pledge not to devalue the Chinese yuan to help the country’s exporters and better protect American intellectual property.
On America’s part, the Trump administration canceled new tariffs on roughly $156 billion that it planned to impose on Chinese products last month. It also agreed to cut in half the existing 15 percent tariff rate on roughly $120 billion of Chinese goods that had been imposed on September 2019.
Modupe Gbadeyanka