Oil prices slide on US production data

Business | 28 Nov 2019 12:47 pm

Oil fell for a second day after US crude production increased to a record and President Donald Trump signed a bill into law expressing support for the Hong Kong protesters, potentially complicating trade talks with China, Bloomberg reports.

Futures declined by 0.5 percent in New York after dropping by the same amount Wednesday.

American stockpiles defied analyst expectations to expand for a fifth week and output reached 12.9 million barrels a day, according to the Energy Information Administration.

Crude has been rising since early October on signs the U.S. and China will reach a limited trade deal, although it’s not clear whether an agreement that doesn’t roll back existing tariffs will do much to spur oil demand.

On the supply side, expectations that OPEC and its partners will make deeper cuts to crude production seem to have all but evaporated, with only one of 35 traders and analysts surveyed by Bloomberg forecasting more reductions.

“Asian oil traders are perhaps wary of China’s reaction to the passing of the U.S. Hong Kong law” and the possible impact on trade negotiations, Jeffrey Halley, a senior analyst at Oanda in Singapore, said in a note.

Dips in the spot market are likely to be limited for now as the US Thanksgiving holiday mutes activity, he said.

West Texas Intermediate for January delivery fell 25 US cents, or 0.4 percent, to US$57.86 a barrel on the New York Mercantile Exchange as of 11:53 a.m. in Singapore. The contract lost 30 US cents to settle at US$58.11 a barrel on Wednesday.

Brent for January settlement dropped by 0.3 percent to  US$63.86 a barrel on the ICE Futures Europe Exchange after losing 0.3 percent on Wednesday. The global benchmark crude traded at a US$6 premium to WTI.

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