Oil prices fell on Monday 11th of November 2019, amid the US-China trade war and the overall decreasing demand of the oil. The two most powerful economies have been in a trade war for almost 16 months, which has caused an overall slowdown in the global economy. The trade war has caused a slowdown in productions in both of the massive economies, which has caused uncertainties regarding the future demand for oil. Experts believe that the supply of oil in the market has crossed the demand and hence the prices are showing its effect.
Brent Crude went down by 0.9% or 55 cents and currently stands at $61.96/barrel, whereas the US crude decreased by 47 cents or 0.8% and currently stands at $56.77/barrel.
Trump said in a press conference on Saturday 9th of Nov 2019, that the trade talks with China are going well. However, he said that Washington would not make a deal with Beijing if it’s not the right one for America.
Market Analyst at CMC Markets in Singapore Margaret Yang said that, “Oil prices are dampened by re-escalating trade uncertainties and a strengthening US Dollar. Supply is expected to remain ample in the near term as Organization of the Petroleum Exporting Countries (OPEC) showed it is reluctant for further reductions, while production in North America remains robust.”
The OPEC alliance has taken measures to increase oil prices and have cut oil production by 1.2 million barrels/day since March 2019. Meanwhile, in the US, the energy companies reduced the number of operating oil rigs. Drillers stopped work at seven rigs and this brings the operational rigs count to 684, which is the lowest number of operating rigs since April 2017.