Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Oil Treads Water as Traders Wonder If China Will Meet Trump’s Demands

Published 2020-01-17, 01:28 p/m
Updated 2020-01-17, 01:52 p/m
© Reuters.

© Reuters.

By Barani Krishana

Investing.com – Two days after the so-called landmark deal, oil traders are wondering if China will really fulfill its energy purchases under the phase one deal as U.S. Crude prices were little changed Friday, showing losses on the week, on worries the trade war will be back if Beijing falls short of the deal.

New York-traded West Texas Intermediate, the benchmark for U.S. crude, was off 14 cents, or 0.2%, at $58.38 per barrel by 1:15 PM ET (18:15 GMT). Despite Thursday’s 1.2% rebound, WTI was down 1% on the week.

London-traded Brent, the global crude benchmark, was flat at $64.62. Brent was down 0.1% on the week, notwithstanding Friday’s gain, as well as the 1% rise in the previous session.

After a 36% gain for WTI and 24% for Brent in 2018, oil prices have swung this month, surging on a heightening of U.S.-Iran tensions, then slumping on a huge build in U.S. fuel stockpiles.

Wednesday’s phase one lift lifted oil bulls’ spirits again, as China committed on paper to buying at least $50 billion in energy purchases, including crude oil, over the next two years. Yet, with the Trump Administration keeping tariffs it had imposed so far on Beijing, analysts have wondered how the step up in U.S. exports to China will be possible.

“It also remains to be seen how China's existing suppliers would react to losing market share in the world's top crude importer,” Clyde Russell, analyst at Refinitiv, said. “Would they simply roll over, or, more likely, try to protect their market share while going after U.S. customers outside of China?”

China’s biggest oil suppliers, historically, have always been from the Middle East, led by Saudi Arabia, which is the third-largest crude producer after the United States and Russia.

Further weighing on crude prices Friday was the weekly oil rig count published by industry firm Baker Hughes, which showed drillers adding 14 rigs this week to bring to 673 the total number across U.S. oil fields. A higher rig count, in the simplest sense, means higher crude production. Over the past three weeks, the rig count had fallen, extending last year’s drop of 208.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.