New York — Oil prices lost about 2% on Monday on worries that global crude demand could stay under pressure as few details about the first phase of a U.S.-China trade deal did little to assure a quick resolution to the tariff fight.
Oil prices also felt pressure as the U.S. dollar, which has an inverse relationship with crude prices, gained as waning trade deal hopes and ongoing concerns over Britain’s exit from the European Union attracted safe-haven investments.
Brent crude LCOc1 settled at $59.35 a barrel, shedding $1.16, or 1.92%, while U.S. West Texas Intermediate (WTI) crude CLc1 settled at $53.59 a barrel, losing $1.11, or 2.03%.
“The complex is in (the) process of relinquishing a major portion of the late week trade inspired gains as conflicting indications out of the U.S. and China regarding trade progress is reducing risk appetite,” said Jim Ritterbusch of Ritterbusch and Associates.
Late on Friday, Washington and Beijing outlined the first stage of a trade deal and suspended this week’s scheduled U.S. tariff hikes. Brent and WTI rose more than 3% last week, their first weekly increase since the week starting Sept. 20, on signs of progress toward a trade deal that would boost crude demand.
But optimism that the trade negotiations would prove successful faded, as China indicated further discussions were needed and U.S. Treasury Secretary Steven Mnuchin said the next round of tariffs on Chinese imports are still set to take effect on Dec. 15 if a deal has not been reached by then.
But existing tariffs remain in place and officials on both sides said much more work was needed before an accord could be agreed.
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