Oil dips as U.S.-China trade deal hopes fade
Brent crude futures edged down 16 cents, or 0.3%, to $61.90 a barrel by 0124 GMT, while U.S. West Texas Intermediate crude was at $56.65, down 15 cents or 0.3%.
Oil prices dipped on Wednesday as prospects for a trade deal between the United States and China dimmed, weighing on the outlook for the global economy and energy demand. U.S. President Donald Trump said on Wednesday that the two countries were close to finalizing a trade deal, but he fell short of providing a date or venue for the signing ceremony, disappointing investors.
Brent crude futures edged down 16 cents, or 0.3%, to $61.90 a barrel by 0124 GMT, while U.S. West Texas Intermediate crude was at $56.65, down 15 cents or 0.3%. A forecast by the International Energy Agency`s for slower global oil demand growth post-2025 also weighed on the market.
Global oil demand growth is expected to grow by 1 million barrels per day on average to 2025 but is forecast to slow to an average of 100,000 bpd a year from then on as fuel efficiency improves and more electric vehicles hit the road, the IEA said in its annual World Energy Outlook for the period to 2040.
Even as production growth in the United States slows from breakneck pace of recent years, the world`s top oil producer will still account for 85% of the increase in global oil production to 2030, and for 30% of the increase in gas, the agency said.
The higher U.S. output pushes down the share of OPEC members and Russia in total oil production, which is expected to fall to 47% in 2030 from 55% in the mid-2000s. "The effects have been striking, with U.S. shale now acting as a strong counterweight to efforts to manage oil markets," IEA`s Executive Director Fatih Birol said.
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In the United States, crude oil inventories were forecast to have risen for a third straight week last week, while refined products inventories likely declined, a preliminary Reuters poll showed on Tuesday. Five analysts polled by Reuters estimated, on average, that crude inventories rose by around 1.6 million barrels in the week to Nov. 8. The American Petroleum Institute (API) is scheduled to release its data for the latest week at 4:30 p.m. EST (2130 GMT) on Wednesday, while the weekly report from the U.S. Energy Information Administration (EIA) is due at 11:00 a.m. EST on Thursday.
Separately, the 590,000 barrel-per-day Keystone oil pipeline that transports Canadian heavy crude to the United States has restarted operations following an oil spill two weeks ago, a U.S. regulator said on Tuesday.