Oil Achieves Weekly Gains Despite Mixed Messages From China, U.S. Trade Negotiators

by Ship & Bunker News Team
Friday November 8, 2019

Even though crude prices fell earlier in Friday's session due to U.S. president Donald Trump denying reports that he had agreed to China's request to roll back tariffs, the commodity still eked out modest gains at the session's end.

Some analysts, in noting the market's volatility, suggested that a simple turn of phrase from any politician or notable could cause trading optimism to reach new highs.

Brent on Friday rose 22 cents to settle at $62.51 per barrel, while West Texas Intermediate rose 9 cents to settle at $57.24 per barrel; Brent posted a weekly rise of 1.3 percent, while WTI gained 1.9 percent.

Trump's comment came after officials from both countries said China and the U.S. agreed to roll back tariffs on each others' goods in a phase one trade deal if it is ratified.

Some experts point out that even if a deal is signed, it won't be an instant solution to perceived troubles in the crude marketplace: "Even if a partial agreement is reached, the impetus for demand will not be enough to avoid an oversupply next year, meaning that OPEC [the Organization of the Petroleum Exporting Countries] will still need to make bigger production cuts," Commerzbank said in a note.

John Kilduff, founding partner at Again Capital, noted that "Given the volatility around the U.S.-China trade saga, it's hard to be short over the weekend; the turn of a phrase could restore the very hopes that were dashed just last night over a deal being struck."

As for whether or not OPEC is inclined to make bigger cuts, Ehsan Khoman, head of MENA research and strategy at MUFG, remarked, "There appears (to be) an increasing likelihood that Saudi Arabia, along with other core OPEC+ members, the UAE, Kuwait and Iraq, might need to contemplate deepening the magnitude of cuts in the upcoming OPEC+ meeting in Vienna between 5-6 December, even if Russia refrains from cooperating."