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Oil futures lost ground Thursday, with traders citing uncertainty around a so-called phase one trade deal between the U.S. and China a day after President Donald Trump offered no details on a potential pact in a speech and as a news report indicated that a dispute over potential tariff rollbacks remain a hurdle in negotiations.
West Texas Intermediate crude for December delivery CLZ19, -0.49% fell 32 cents, or 0.6%, to $56.48 a barrel, while January Brent BRNF20, -0.82% decined 61 cents, or 1%, to $61.45 a barrel.
“As has been the case for much of this year, the initial signs of progress and then subsequent fading of a trade deal on the U.S.-China dispute has influenced oil markets,” said Mihir Kapadia, chief executive of Sun Global Investments, in a note.
In a Wednesday speech at the Economic Club of New York, Trump said a “significant phase one” deal could happen soon, but only if the deal worked to the advantage of U.S. workers and businesses. The Wall Street Journal late Wednesday reported that tariffs were emerging as the main stumbling block to efforts by the U.S. and China to reach a limited trade deal. Specifically, the hurdle surrounds whether the U.S. has agreed to remove existing tariffs as part of a partial phase one deal or whether the U.S. would only cancel tariffs that are set to take effect on Dec. 15, the report said.
Kapadia said a forecast by the International Energy Agency, in its annual outlook, for a slowdown in global oil-demand growth after 2025 was also contributing to a negative tone.
See: IEA predicts U.S. shale will become a dominant force in global energy markets
In other energy trading, December gasoline RBZ19, -0.17% was off 0.1% at $1.6127 a gallon, while December heating oil HOZ19, -1.16% fell 1% to $1.8781 a gallon. December natural-gas futures NGZ19, -1.03% declined 1% to $2.596 per million British thermal units.
