Oil. Picture: REUTERS
Oil. Picture: REUTERS

Seoul — Oil prices were little changed on Tuesday as lingering worries over a global economic slowdown that could hurt oil demand offset some signs of progress in US-China trade talks.

Brent crude oil futures were down 6c, or 0.1% to $58.90 a barrel by 3.09am GMT, while US West Texas Intermediate (WTI) crude futures were flat at $53.31 a barrel.

US President Donald Trump on Monday said efforts to end a US trade war with China were going well as negotiators from the two nations work to nail down a phase one trade deal text for their leaders to sign when they meet at the Apec summit in November.

“Commodity markets were cautiously optimistic amid signs that a trade deal was close to being signed by the US and China,” ANZ bank said in a note. “Crude oil prices remained in the doldrums, with ongoing economic weakness weighing on sentiment,” it said.

Brent has fallen 22% from its April peak, while WTI is down 20%.

Though there are some signs of easing tensions between the world’s two largest economies, US commerce secretary Wilbur Ross said on Monday that an initial trade deal does not need to be finalised in November, emphasising the need to get the right deal.

Adding to tensions, China is seeking $2.4bn in retaliatory sanctions against the US for non-compliance with a WTO ruling in a tariffs case dating back to the era of president Barack Obama.

“In the short term, a possibility of the US and China signing an initial deal could support prices, but it remains to be seen whether tariffs set for December will be removed,” said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul.

Russia’s missed target for cutting its September oil output was putting downward pressure on prices, along with talks between Saudi Arabia and Kuwait to resume oil production from joint oil foilfieldshe Neutral Zone, Kim said.

Russia, the world’s second-largest oil producer, pumped more oil in September than it pledged under a global supply cut deal due to an increase in natural gas condensate output.

US crude stockpiles are expected to have increased for a sixth straight week, while distillates and petrol stocks are likely to have fallen in the week to October 18, a preliminary Reuters poll showed on Monday.