Pending the agreement of the two main producers to extend the production reduction agreement
According to Reuters, oil prices rose more than 1% on Monday as trade tensions between the United States and China continued to threaten demand for crude and Saudi and Russian major producers have yet to agree to extend the cut-off deal.
Brent crude futures fell one dollar by 1.6%; the settlement price was settled at 62.29 dollars a barrel, and the US crude lost 30 cents, or 1.4% to close at 63.26 dollars a barrel, according to Reuters.
Trump has expressed his willingness to impose a new round of punitive tariffs on Chinese imports if he does not reach a trade deal with the Chinese president at the G20 summit later this month.
China welcomes further trade talks with Washington, but has nothing to announce about a possible meeting, according to the Chinese Foreign Ministry.
China’s crude oil imports fell to about 40.23 million tons in May, from an all-time high of 43.73 million tons in April, customs data showed, due to a drop in Iranian imports due to US sanctions and maintenance of refineries.
“As the US-China fee worries grow, we see further downward corrections in world oil demand both this year and beyond, which will put a ceiling on any price increases that may occur from time to another,” said Jim Ritterbusch of Retrepouch & Co. in a note.
Barclays Bank said in a note that its economists have lowered their GDP growth forecasts for the United States, China, India, and Brazil, which contribute more than three quarters of the forecast for growth in oil demand this year.
OPEC and some non-member countries, such as Russia, have cut supply since the beginning of the year to support prices, and the deal ends this month.
But Russian Energy Minister, Alexander Novak said the risk still exists that oil producers are pumping too much crude and prices may fall sharply. Novak said he did not rule out a drop in oil prices to 30 dollars a barrel if the global agreement was not extended.