Oil set to close week in the negative after four days of decline
Markets remain pessimistic about a US-China trade deal
Oil prices remained flat and poised to close in the negative for a second week as markets awash with US crude kept sentiment bearish.
Brent, the benchmark for light, sweet crude was trading at $58.26 per barrel at 9.50am UAE time, while West Texas Intermediate, which largely tracks North American crude grades, was also in the negative at $52.53.
Oil prices have gone back to trading below $60 per barrel, sliding as much as 16 per cent after spiking about 20 per cent following the September 14 attacks on Saudi Arabia's oil facilities, which knocked out 5 per cent of global supply.
Strong US inventory build-up has pressured prices lower this week leading to four days of decline. US inventory including its Strategic Petroleum Reserve increased by 2.9 million barrels during the week ending October 4, following three weeks of inventory build-up with the volumes for last month at 3.1 million barrels, according to the Energy Information Administration.
Markets have also performed poorly due to the ongoing stalemate between the US and China over trade issues. Negotiations between delegates from the world's two biggest economies are set to begin today, but signs of reaching a deal seem dim following the US travel ban on some Chinese officials and the blacklisting of eight tech companies from the country. The US has also been pressuring its pension funds to avoid investing in China.
"Though there is little to be cheerful about, Chinese Vice Premier Lui He and his team arrived in Washington yesterday with the hope of getting at least a partial agreement done," London Capital Group said in a note. "A currency pact would be essential for sealing an interim deal," it added.
The officials are likely to broach other "less agreeable subjects" such as intellectual property, data security and forced technology transfers.
The trade war and tit-for-tat tariffs between the US and China began with the White House accusing Beijing of intellectual property theft.
Updated: October 10, 2019 11:05 AM