Oil slips as weak China exports highlight trade war impact
* Brent, WTI slide after gains last week
* Chinese exports fall, rekindle worries about trade war
* China's exports in Nov fall 1.1% y/y vs expectations of
(Updates prices adds details, changes dateline, previously
By Jessica Resnick-Ault
NEW YORK, Dec 9 (Reuters) - Oil prices fell on Monday after
data showed Chinese exports declined for a fourth straight
month, sending jitters through a market already concerned about
damage to global demand by the trade war between Washington and
Brent futures were down 15 cents, or 0.25%, at
$64.24 per barrel by 12:29 p.m. EDT (1629 GMT), after gaining
about 3% last week on news that OPEC and its allies would deepen
West Texas Intermediate oil futures were down 13
cents, or 0.24% to $59.07 a barrel, having risen about 7% last
week on the prospects for lower production from OPEC+, which is
made up of the Organization of the Petroleum Exporting Countries
and associated producers including Russia.
Monday's sudden chill came after customs data released on
Sunday showed exports from China in November fell 1.1% from a
year earlier, confounding expectations for a 1% rise in a
"That China trade data is a factor, certainly," said John
Kilduff, a partner at Again Capital.
Washington and Beijing have been trying to agree a trade
deal that will end tit-for-tat tariffs, but talks have dragged
on for months.
"We're coming up to a bit of a precipice, with the potential
for new tariffs to be slapped on Sunday, so this is going to be
an intense week," Kilduff said. Additional tariffs could weigh
on the demand outlook for crude, he added.
Beijing hopes an agreement with the United States can be
reached as soon as possible, China's Assistant Commerce Minister
Ren Hongbin said on Monday.
Monday's declines also went against signs on Friday that
China was easing its stance on resolving the trade dispute with
the United States, confirming that it was waiving import tariffs
for some soybean and pork shipments.
The price drop also put an end to a strong run in previous
sessions fuelled by hopes for the OPEC+ production curb deal.
On Friday, OPEC+ agreed to deepen their output cuts from 1.2
million barrels per day (bpd) to 1.7 million bpd, representing
about 1.7% of global production.
"This decision crystallises an important shift in strategy
to managing short-term physical imbalances rather than trying to
correct perceived long-term imbalances through open-ended
commitments," Goldman Sachs said in a note.
The bank revised its Brent spot price forecast to $63 per
barrel for 2020, up from a previous estimate of $60.
BofA Merrill Lynch said in a note that strong compliance
with the OPEC+ along with positive economic developments such as
a U.S.-China trade deal could push Brent to $70 a barrel before
the second quarter of 2020.
(Reporting by Jessica Resnick-Ault; Additional reporting by
Aaron Sheldrick and Noah Browning; Editing by David Evans and
First Published: 2019-12-09 03:39:51
Updated 2019-12-09 19:41:10
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