By Adedapo Adesanya
Oil prices fell on the last trading day of the year on Tuesday, December 31, despite US President Donald Trump saying that the phase one trade deal between the United States and China would be signed on January 15 at the White House.
Brent crude was down 67 cents or 1 percent at $66 per barrel while the US West Texas Intermediate (WTI) crude fell 62 cents or 1.01 percent at $61.06 per barrel.
In a tweet on Tuesday, the US president said “high-level representatives of China” would attend an official ceremony at the White House, adding he would also be travelling to Beijing for talks on the second phase of the deal.
The deal, which was announced on December 13, will see plans for new tariffs on $160 billion by the US on Chinese imports of items such as smartphones and toys suspended. On its part, China has agreed to buy more US farming products and make fresh commitments to improve intellectual property protections.
“I will be signing our very large and comprehensive Phase One Trade Deal with China on January 15,” Mr Trump said in the tweet.
The oil market was also affected by low market participants spurred by the end of the year holidays.
Also affecting prices were tensions in the Middle East which kept investors skeptical as thousands of protesters and militia fighters gathered outside the US embassy in Baghdad to condemn US air strikes against Iraq.
Reports said that security guards inside the US embassy fired stun grenades at protesters and the U.S. ambassador and other staff were evacuated due to security concerns. The U.S. strikes could pull Iraq further into the heart of a proxy conflict between the United States and Iran.
Looking ahead, US crude inventories are expected to fall by about 3.2 million barrels in the week to December 27, this will signify a third consecutive weekly decline and as such, oil prices are expected to recover before the week runs out.
Dipo Olowookere