By Adedapo Adesanya
Oil prices shed more than one percent on Monday after last week’s gains as uncertainties over the trade talks between the United States and China swayed on the market.
As at 9pm Nigerian Time (GMT +1), the Brent crude futures, which rose above $63 last week, went down by $1.08 or 1.71 percent on Monday to trade at $62.22 per barrel.
In the same vein, the US West Texas Intermediate (WTI) crude was also down by 92 Cents or 1.59 percent to sell at $56.80 per barrel, having traded close to $58 per barrel last Friday.
The global market was shaken when a report that a US-China trade deal might not get through and this caused concerns which, according to analysts on Monday, pushed oil prices lower.
The oil markets, which is keen for any update on the talks, dropped following this information.
Over the weekend, Chinese media reported that the world’s two biggest economies had “constructive talks” on trade in a high-level call on Saturday.
CNBC, in its report, quoted a Chinese government source who said the mood in China about a trade deal being reached was “pessimistic” due to American President Donald Trump’s reluctance to roll back on tariffs.
Oil prices also dropped on the first day of the week due to expectations of lower seasonal demand for gasoline (petrol) in the United States.
On the supply side, Business Post reports that the Organisation of the Petroleum Exporting Countries (OPEC) and its allied producers expect demand for its oil to fall in 2020.
The cartel has cut production output by 1.2 million barrels per day to its members in a deal that would run till March 2020.
However, recently there had been talks that the producers won’t push for deeper oil supply cuts when they meet next month in Vienna on December 5 and 6 to review the policy.
It was said that the member states and allies may stick to their current output targets and encourage producers to comply more fully with those targets.
On the basis of this, oil prices may not improve on Tuesday as further expected falls are expected following the continued rise in US shale oil production.
