Oil prices react badly to doubt about US-China trade talks

London — Oil prices fell on Friday as the resolution of trade talks between the US and China remained in doubt, and data from China stoked further concerns over an economic slowdown that could dent fuel demand.

International Brent crude oil futures were at $60.53 per barrel at 9.50am GMT, 31 US cents, or half a percent, below their last close.

US West Texas Intermediate (WTI) futures were at $53.42 per barrel, down 37c or 0.69%.

Global markets were supported as US President Donald Trump tweeted on Thursday that he would meet Chinese President Xi Jinping soon to try to seal a comprehensive trade deal.

But Trump added further uncertainty to the talks by telling reporters: “This is either going to be a very big deal, or it’s going to be a deal that we’ll just postpone for a little while.”

Crude prices were weighed down by a survey on Friday that showed China’s factory activity shrank by the most in almost three years in January amid slumping orders, reinforcing fears a slowdown in the world’s second-largest economy is deepening.

With Chinese industry a key consumer of fuels such as diesel, such a slowdown would also be likely to hit fuel demand.

“Many traders recognise that sense is likely to prevail and a deal will be struck after the summit — although the shape of any deal will continue to drive a jittery market,” Cantor Fitzgerald Europe said in a note.

“This has overshadowed bullish indicators.”