Oil starts the week lower on disappointing Chinese export news
The fall in prices has put an end to last week’s rallies fuelled by the Opec+ production curb deal
London — Oil prices fell on Monday after data showed Chinese exports declined for a fourth straight month, sending jitters through a market already concerned about damage being done to global demand by the trade war between Washington and Beijing.
Brent futures were down 44c, or 0.68%, at $63.95 a barrel by 9.35am GMT, after gaining about 3% last week on news that Opec and its allies would deepen output cuts.
West Texas Intermediate oil futures were down 48c, or 0.81%, to $58.72 a barrel, having risen about 7% last week on the prospects for lower production from Opec+, which is made up of the Opec and associated producers including Russia.
Monday’s sudden chill came after customs data released on Sunday showed exports from the world’s second-biggest economy in November fell 1.1% from a year earlier, confounding expectations for a 1% rise in a Reuters poll.
The weak start to the week came despite data showing China’s crude imports jumped to a record, revealing just how deep jitters are embedded in the market over the US-China trade row that has stymied global growth and oil demand.
“China is clearly not immune to either the US trade tariffs, or the lingering slowdown in the broader global economy,” said Jeffrey Halley, senior market analyst at Oanda.
Washington and Beijing have been trying to agree a trade deal that will end tit-for-tat tariffs, but talks have dragged on for months as they wrangle over key details.
Beijing hopes an agreement with the US can be reached as soon as possible, China’s assistant commerce minister Ren Hongbin said on Monday.
Monday’s declines also went against signs on Friday that China was easing its stance on resolving the trade dispute with the US, confirming that it was waiving import tariffs for some soybean and pork shipments.
The price drops also put an end to a strong run in previous sessions fuelled by hopes for the Opec+ production curb deal.
On Friday, those producers agreed to deepen their output cuts from 1.2-million barrels a day to 1.7-million barrels a day, representing about 1.7% of global production.
“This decision crystallises an important shift in strategy to managing short-term physical imbalances rather than trying to correct perceived long-term imbalances through open-ended commitments,” Goldman Sachs said in a note.