By Adedapo Adesanya
Prices of major oil futures dropped on Tuesday on the impact of latest developments in the forthcoming October 10 – 11 trade talks between the United States and China.
On Monday night, 28 Chinese companies were blacklisted by the United States due to their alleged role in human-rights violations against Muslim minorities. This came ahead of high-level discussions between officials of the US and China on Thursday and Friday and it affected the prospects including oil and stocks.
As a result (as at 8 p.m. [GMT +1]), Brent Crude dropped 23 cents or 0.39 percent to trade at $58.12 per barrel, while the US crude, West Texas Intermediate (WTI) lost 24 cents or 0.45 percent to trade at $52.51 per barrel.
According to Tuesday reports monitored by Business Post, the Trump administration was moving ahead with discussions around possible restrictions on capital flows into China, particularly investments made by US government pension funds.
Oil prices were also pressured by weak economic data after U.S. producer prices fell unexpectedly in September, weighed down by lower costs of goods and services, which could give the Federal Reserve room to cut interest rates again this month.
However, protests in OPEC member countries Iraq and Ecuador threatened to disrupt their oil output and supported prices earlier.
In Iraq, potential attacks by Turkey on Kurdish forces in northeast Syria could take place close to the Iraqi border, could place pressures on Kurdistan’s economy and its oil production.
While in Ecuador, the country’s energy ministry said protests against austerity could reduce its oil output by 59,450 barrels per day.
Also, Saudi Arabia following the reinstallation of its Aramco plants attacked on September 14 reiterated on Tuesday that it was ready to meet global oil needs.
Dipo Olowookere