Oil prices have fallen this Friday as concerns about global growth and slowing demand lingered despite hints of progress in US-China trade talks, setting up prices for weekly losses after days of swinging back and forth
Gloom over the economic impact of the trade dispute between Washington and Beijing has left investors shrugging off a strong commitment from OPEC producers to cut down the output.
There is a battle between the forces of OPEC and those of slowing global growth and thus demand.
There is weak confidence in the markets by economists in a Reuter’s poll who predicted the US-China trade spat will worsen or at best stay the same over the coming year.
Still, President Donald Trump said on Thursday he would not rule out an interim deal with China on trade, though he prefers a comprehensive agreement.
In oil markets, however, concern over whether Trump can achieve progress on the trade dispute has overshadowed OPEC’s Thursday agreement to reduce output by asking members; Iraq and Nigeria to bring their production back in line with targets.
OPEC is striving to prevent overproduction amid soaring US production and a slowing global economy.
OPEC+ has agreed cut of 1.2 million barrels per day as Iranian and Venezuelan exports collapsed due to sanctions.
Trade tensions and reduced risk of tougher sanctions on Iran and Venezuela will limit the stability of oil prices.
Those trade tensions are also hitting the shipping sector as the flow of goods and commodities slows, the International Energy Agency said on Thursday.
That will lead to weaker growth than previously expected in oil demand from the shipping sector next year, despite a shift to cleaner fuel, the agency said.