By Adedapo Adesanya
Oil prices ended the week on Friday, November 8, 2019 positive with major oil futures holding gains despite fresh pessimism surrounding the US-China trade deal.
Earlier in the day, oil prices fell more than 1 percent following comments from US President Donald Trump that he has not agreed to roll back tariffs placed on China.
However, as at Friday night, Business Post monitored that the future was trading up 36 Cents or 0.58 percent to trade at $62.66 per barrel, while the US’ West Texas Intermediate (WTI) Crude was also appreciating by 27 Cents equivalent to 0.47 percent to trade at $57.42 per barrel.
After the comment, oil prices took a hit with Brent reaching a session low of $60.66 a barrel and WTI dropping to $55.76 a barrel.
According to CNBC analysis, the 16-month trade war between the world’s two biggest economies has slowed economic growth around the world and prompted analysts to lower forecasts for oil demand, raising concerns that a supply glut could develop in 2020.
It was reported on Thursday that China and the United States had agreed to roll back tariffs on each others’ goods in the phase one trade deal when it is signed by both nations.
However, a lot of scepticism from the Donald Trump administration have shown its effect on the deal and even on the possibility of lifting the tariffs placed on Chinese goods.
Meanwhile, also lending a hand to the good outlook of oil prices , the optimism expressed by the Organisation of the Petroleum Exporting Countries (OPEC) Secretary-General Mohammad Barkindo earlier in the week noted there was a positive outlook for 2020, saying there could be no need to cut output more deeply.
A deal by producers and allies such as Russia will meet on December 5-6 in Vienna to review that policy which will help limit supplies until March next year.
However, analysts believe that if the trade agreement between China and the US is reached, there will still be need for OPEC and its members to take a bigger production cut as the market is projected to suffer oversupply in 2020.
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