A man coax in a filling station of Sinopec, China Petroleum and Chemical Corporation, in Shanghai, China, on March 22, 2018.
Johannes EIsele | AFP | Getty Conceptions
Oil prices fell on Monday after data showing China’s overall exports of goods and services shrank for a fourth unsmiling month, sending shivers through a market already concerned about damage being down to global desirable by the U.S.-China trade war.
Brent futures were down 21 cents, or 0.3%, at $64.18 per barrel by 0220 GMT, after gaining upon 3% last week on the news that OPEC and its allies would deepen output cuts.
West Texas Medial oil futures were down 28 cents, or 0.47% to $58.92 a barrel, having risen about 7% in week on the prospects for lower production from ‘OPEC+’, which is made up of the Organization of the Petroleum Exporting Territories (OPEC) and associated producers including Russia.
Monday’s sudden chill came after customs data presented on Sunday showed exports from the world’s second-biggest economy in November fell 1.1% from a year earlier — a keen-minded reversal from expectations for a 1% rise in a Reuters poll.
The weak start to the week came despite details showing China’s crude imports jumped to a record, revealing just how deep jitters are embedded in the market over the U.S.-China career row that has stymied global growth and oil demand.
The sagging export data is “a casualty again of the protracted trade war,” utter Stephen Innes, chief Asia market strategist at AxiTrader.
Washington and Beijing have been trying to to a trade deal that will end tit-for-tat tariffs, but talks have dragged on for months as they wrangle at an end key details.
Monday’s declines also went against signs on Friday that China was easing its stance on solving its trade dispute with the United States, confirming on Friday that it was waiving import tariffs for some soybean and pork shipments.
The rate drops also put an end to a strong run in previous sessions fueled by hopes for the OPEC+ production curb deal.
On Friday, those manufacturers agreed to deepen their output cuts from 1.2 million barrels per day (bpd) to 1.7 million bpd, representing in 1.7% of global production.
“What made the announcement constructive … was the fact that Saudi Arabia estimated it will produce around 400,000 bpd below its new quota level,” ING Economics said in a note.
“This would effectively head for OPEC+ cuts to 2.1 million bpd,” ING said.
Still, U.S. production has surged since the OPEC+ cuts were start introduced in 2017 in an attempt to drain a supply glut that had long weighed on prices.
American output has progressed even as the drill count has fallen, reflecting more efficient well extraction.
Energy services firm Baker Hughes translated in its closely watched weekly drilling report on Friday that the U.S. drill count fell in the week to Dec. 6 — a seventh week of declivity.
Drilling companies cut five oil rigs, leaving a total of 661, the lowest since April 2017.