Oil steady near $58 on glimmer of progress in trade war talks
SINGAPORE (Bloomberg) - Oil steadied near $58/bbl as China made a concession that could help resolve trade tensions with the U.S. that have weighed on the global economy and fuel demand.
Futures were little changed in New York, holding about $1 below the two-month intraday high reached on Friday. China said over the weekend it will raise penalties on violations of intellectual property rights in an attempt to address one of the key sticking points in talks with Washington. The ongoing impasse has eroded economic sentiment in the world’s two biggest oil users.
Crude has rebounded since early October on signs the U.S. and China are moving toward a limited trade deal, but prices have swung back and forth on frequent shifts in sentiment. Oil investors are growing restless as the negotiations drag on, with money managers cutting their net bets on a West Texas Intermediate rally by 13% in the week ended Nov. 19.
“The upswing being enjoyed by prices is due on the one hand to renewed optimism about an initial partial trade deal,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. “Pinning all one’s hopes on this could prove a mistake. There is still no certainty whatsoever that any deal will actually be reached in the new few weeks.”
WTI for January delivery was little changed at $57.77/bbl on the New York Mercantile Exchange as of 11:07 a.m. in London. It reached $58.74/bbl on Friday, the highest since Sept. 23, before settling 1.4% lower.
Brent for January settlement rose $0.02 to $63.41/bbl on the London-based ICE Futures Europe Exchange. The contract dropped 0.9% Friday. The global benchmark traded at a $5.65 premium to WTI.
China’s concession on intellectual property comes as trade negotiators have been trying to bridge the remaining differences including Beijing’s pledges to buy American farm products, protect IP rights and open its economy further to foreign companies. However, the two countries have struggled to agree on what tariffs each side would roll back as part of the agreement’s initial step.
