Oil prices fell as data shows China overall exports shrank-Analysts
Analysts report showed on Monday that Oil prices fell after data showed China’s overall exports of goods and services shrank for a fourth straight month, sending anxieties through a market that is already concerned about damage being done to global demand by the Sino-US trade war.
Brent futures were down 21 cents, at $64.18 per barrel after gaining about 3 per cent last week on the news that OPEC and its allies would deepen output cuts.
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They said, West Texas Intermediate oil futures were down 28 cents, to $58.92 a barrel, having risen about 7 per cent last week on the prospects for lower production from ‘OPEC+’, which is made up of the Organization of the Petroleum Exporting Countries (OPEC) and associated producers including Russia.
Daily Times gathered that, 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 per cent from a year earlier, a sharp reversal from expectations for a one per cent rise in a Reuters poll.
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.
Report has it that, sagging export data is a casualty of the protracted trade war, while Washington and Beijing have been trying to agree on a trade deal that will end tit-for-tat tariffs, but talks have dragged on for months as they wrangle over key details.
Monday’s declines also went against signs on Friday that China was easing its stance on resolving its trade dispute with the United States, confirming on Friday 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.
Daily Times reported on Friday that, OPEC + producers agreed to deepen their output cuts from 1.2 million barrels per day (bpd) to 1.7 million bpd, representing about 1.7 per cent of global production.
ING Economics states that, what made the announcement believable was the fact that Saudi Arabia said, it will produce around 400,000 bpd below its new quota level, which would effectively take OPEC+ cuts to 2.1 million bpd.
Reports have it that, US production has surged since the OPEC+ cuts were first introduced in 2017 in an attempt to drain a supply glut that had long weighed on prices.
American output has risen even as the drill count has fallen, reflecting more efficient well extraction.
Energy services firm Baker Hughes said in its closely watched weekly drilling report on Friday that the US drill count fell in the week to Dec. 6, the seventh week of decline.
Drilling companies cut five oil rigs, leaving a total of 661, the lowest since April 2017.
