Oil falls as worries on US-China trade negotiations build

Daily December Brent Crude Oil

Daily December Brent Crude Oil

Days before one of the highlights for oil this week-the new round of trade talks between the USA and China-the United States placed 28 Chinese entities on a watch list over alleged "human rights violations and abuses in the implementation of China's campaign of repression, mass arbitrary detention, and high-technology surveillance".

"Renewed purchases of United States agricultural products by China in recent weeks has kindled hope that Beijing may secure a quid pro quo on parts of their trade" deal, said Vandana Hari, the founder of industry consultant Vanda Insights. -China trade talks that take place in Washington on Thursday, although prospects for progress dimmed after Washington blacklisted more Chinese firms and President Donald Trump said a quick trade deal was unlikely.

Brent crude futures LCOc1 edged down 28 cents to $58.09 a barrel by 0300 GMT, while U.S. West Texas Intermediate (WTI) crude CLc1 was at $52.64, down 17 cents.

Notes: In my last Oil Price Outlook we noted that crude, "prices failed at key confluence resistance last week and leaves the broader downtrend intact".

-China trade deal faded and a new poll showed analysts expected US oil crude inventories to have risen last week.

Early in the session, all eyes will be on U.S. Traders are looking for a rise of 1.8 million barrels for the week-ending October 4.

International Monetary Fund (IMF) Managing Director Kristalina Georgieva warned that global economic deceleration could turn into "a more massive slowdown" without action to resolve trade conflicts and support growth. "Oil prices have no choice but to go up".

US stocks tumbled and the pan-European STOXX 600 index fell 1%.

"The market's focus remains on trade tensions and oil demand concerns, ignoring the elevated geopolitical tensions in the Middle East and lower OPEC production in September", said UBS oil analyst Giovanni Staunovo.

In Iraq, protests resumed overnight in Baghdad's Sadr City district.

'Any oil production disruption would occur at a time when Saudi Arabia has lost a significant part of its energy system redundancies (spare capacity),' he said.

Turkey said it had completed preparations for a military operation in northeast Syria after the United States began pulling back troops.

"In Ecuador, protests against austerity measures could reduce the Andean producer's crude output by 59,450 barrels per day", the country's energy ministry said late on Monday. Installations belonging to Saudi Aramco were attacked on September 14, hitting output and triggering a spike in oil prices.

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