Oil slips again as slowing demand trumps Opec cuts
However, Gazprom says the output cuts will support prices at $55-$65 a barrel in the first quarter of 2020
London/Singapore — Oil prices slipped for a second straight session on Tuesday as a slowing global demand outlook outweighed oil cartel Opec’s deal with associated producers last week to deepen output cuts in 2020.
Brent crude was down 17c, or 0.3%, at $64.08 a barrel by 9.54am GMT, while West Texas Intermediate (WTI) oil was down 21c, or 0.4%, lower at $58.81 a barrel. The benchmarks fell 0.2% and 0.3%, respectively, on Monday.
Last week, Opec and associated producers like Russia agreed to deepen output cuts from 1.2-million barrels per day (bpd) to 1.7-million bpd to support prices. However, crude prices have fallen this week as a December 15 deadline for the next round of US tariffs on Chinese imports loomed over markets.
“Now with Opec+ meetings out of the way, the market will likely focus back on trade talk developments, particularly with the December 15 deadline fast approaching,” ING analyst Warren Patterson said.
US President Donald Trump does not want to implement the next round of tariffs, US agriculture secretary Sonny Perdue said on Monday — but he wants “movement” from China to avoid them.
Tamas Varga of oil broker PVM said further US tariffs on Chinese goods “will have a tangible impact both on commodities and equities, at least in the immediate future”.
Data released on Sunday showed exports from China in November fell 1.1% from a year earlier, confounding expectations for a 1% rise in a Reuters poll.
The market is also on edge as a deadline looms over other events this week, with the British election on Thursday and US and European Central Bank (ECB) meetings.
Gazprom Neft CEO Alexander Dyukov said on Tuesday that a decision by Opec and its allies to cut output would help support oil prices at $55-$65 a barrel in the first quarter of 2020.
US crude oil inventories were expected to have dipped last week, while stocks of refined products were seen higher with petrol stocks set to rise for the fifth straight week, a preliminary Reuters poll showed.
The American Petroleum Institute (API), an industry group, is scheduled to release its data for the latest week at 9.30pm GMT on Tuesday, and the weekly EIA report is due at 10.30am on Wednesday.