Nearly 80% of more than 60 economists said US-China trade relations would either worsen or stay the same by the end of 2020. The median probability of a US recession in the next two years held at a high of 45%, and the chance of one in the next 12 months held at 30%.
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.
Asian stocks advanced on Friday on the signs of progress in US-China trade talks, while aggressive stimulus from the European Central Bank also helped counter worries about a global economic slowdown.
In oil markets, however, concern over whether Trump can achieve progress on the trade dispute has overshadowed Opec’s Thursday agreement to trim output by asking members Iraq and Nigeria to bring their production back in line with targets.
Opec is striving to prevent a glut amid soaring US production and a slowing global economy.
Opec+ has over-complied on average with its agreed cut of 1.2 — million barrels per day (bpd) as Iranian and Venezuelan exports collapsed due to sanctions.
“With Opec’s production curbs and ongoing constraints on sanctioned countries, we see the market tightening in quarter four 2019. This should help stabilise prices,” ANZ Research said in a note.
“However, trade tensions and reduced risk of tougher sanctions on Iran and Venezuela will limit the upside,” it said.
Those trade tensions are 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.