Seoul — Oil prices fell on Thursday on concerns of lower fuel demand as talks this week between the US and China, the world’s two largest oil users, are not expected to help end the trade war between them, adding to anxieties about the global economy.
China, the world’s biggest oil importer, has lowered its expectations for talks on Thursday and Friday to end the 15-month-old trade dispute with the US.
President Donald Trump is set to raise the tariff rate on about $250bn of Chinese goods to 30% from 25% on October 15 if some signs of progress are not seen.
The trade dispute between the world’s two largest economies has disrupted global supply chains and slowed the growth of both countries, limiting the growth of their fuel consumption.
Global benchmark Brent crude futures fell 11c, or 0.2%, to $58.21 a barrel by 2.54am in London, while US West Texas Intermediate (WTI) futures were down 11c, or 0.2%, at $52.48 per barrel.
“Should US-China trade negotiations take a turn for the worst, market pessimism will impose sharp negative pressures on oil prices, said Benjamin Lu, commodities analyst at Phillip Futures in Singapore.
Prices were also weighed down by a report of rising stockpiles in the US, which is also the world’s biggest oil producer.
US crude stocks rose 2.9-million barrels in the week to October 4, the Energy Information Administration (EIA) said on Wednesday, more than double analysts’ expectations of an increase of 1.4-million barrels.
Additionally, Opec quietly adjusted its production pact to allow Nigeria to raise its output, adding more supply. Opec granted Nigeria raised the quota to 1.774-million barrels per day (bpd) from 1.685-million bpd, three Opec delegates with knowledge of the matter said.
Opec member Venezuela will also increase its exports despite US economic sanctions that have curtailed shipments from the country. Indian refiner Reliance Industries plans to start loading Venezuelan crude after a four-month pause, in a further sign of expanding crude supply to the market.