Crude Oil Gives up Early Gains to Close Lower Monday
By Adedapo Adesanya
Oil prices on Monday could not meet up to forecasts of trading higher as it gave up early gains spurred by the expected US and China trade deal, following positive news made by both parties regarding the pact.
As at yesterday night, Brent crude, the global benchmark, dropped 30 cents or 0.45 percent to trade at $66.57 per barrel, while the US benchmark, the West Texas Intermediate (WTI) crude, recorded a drop of 19 cents equivalent to 0.19 percent to sell at $61.60 per barrel.
The speculated agreement between the US and China over the 18-month trade dispute that had heavily held back global demand and price stability had seen new positivity, but the uncertainty of a specified time to sign the pact is what is keeping investors on the edge.
On Monday, the White House Trade Adviser, Peter Navarro, said in an interview that the US-China phase one trade deal would likely be signed next week but with no specific set date. The uncertainty surrounding this may continue to dampen investor confidence as witnessed yesterday.
Meanwhile, on China’s part, there were reports that the United States sent an invitation that was met with acceptance from China. This, however, did not confirm if the Chinese Vice Premier, Liu He, would visit Washington this week to sign the deal.
Also, events in the Middle East following the United States air strikes on Sunday against the Kataib Hezbollah militia group pressured prices, adding to protests in Iraq on Saturday which briefly forced the closure of its southern Nassiriya oilfield. However, operations resumed on Monday.
Tuesday may see prices return to gaining ways banking on fresh news regarding the United States and China trade deal and also support from industrial data on crude inventories provided by the American Petroleum Institute (API).