London/Tokyo — Oil prices fell for a second day on Thursday after official data showed US crude and petrol stocks rose and US President Donald Trump signed into law a bill backing protesters in Hong Kong, fueling tensions with China.

Brent crude was down 19c, or 0.3%, at $63.87 a barrel by 8.54am GMT, having dropped 0.3% on Wednesday. West Texas Intermediate (WTI) crude fell 33c, or 0.6%, to $57.78, after losing 0.5% in the previous session.

China warned the US that it would take “firm counter-measures” in response to US legislation backing anti-government protesters in Hong Kong. Investors are concerned that the move might delay further a preliminary agreement between the US and China to put an end to their trade war that has slowed global economic growth and, consequently, consumption of oil.

“The approval of the Hong Kong legislation backing protesters is likely to put the trade agreement into question as China has reiterated its threat of retaliation,” said Hussein Sayed, chief market strategist at FXTM. “If investors suspect that the trade agreement is under real danger, expect to see a sharp sell-off in December. For now, investors are taking a wait-and-see approach.”

Crude stockpiles in the US swelled by 1.6-million barrels last week as production rose to a record 12.9-million barrels per day (bpd) and refinery runs slowed, the Energy Information Administration (EIA) said. Analysts in a Reuters poll had forecast a drop of 418,000 barrels.

Investors have also been focusing on next week’s meeting of oil cartel Opec and allies including Russia, a group known as Opec+, which have been withholding production to support prices.

“We expect Opec+ to roll over its current production-cut deal, which is set to expire at the end of March, by three to six months,” UBS oil analyst Giovanni Staunovo said. “The upshot is that deeper cuts by the entire membership is unlikely.”

Reuters reported that Russia may call on Opec+ to exclude condensate — a high-premium light oil mainly extracted during gas production — from its crude oil production numbers.

Russian energy minister Alexander Novak said on Thursday that there was no decision yet on this issue. “We are holding discussions, making calculations,” Novak told reporters.

In the US, energy services company Baker Hughes reported that the country’s oil drillers reduced the number of drilling rigs for a record 12th month in a row.


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