By Barani Krishnan
Investing.com – Oil couldn’t hold its rebound, nor could it keep volatility down with the Trump administration’s mixed messaging on China of little help.
U.S. West Texas Intermediate went from positive to negative, nearing Friday’s 13-month low, before recovering most of the day’s losses to settle just slightly lower.
U.K. Brent experienced similar volatility, falling below the key $60 per barrel support, before returning above that in late afternoon trade.
While traders attributed the choppy action to different technical levels at play, the swings also appeared to have been exacerbated by signs of on-again, off-again success in preliminary U.S.-China trade talks.
Larry Kudlow, the White House’s top economic adviser, doubted the prospect of a ceasefire in the U.S.-China tariff battle ahead of a planned Friday summit between President Donald Trump and Beijing’s Xi Jinping at the G-20 in Buenos Aires, the Financial Times reported.
Kudlow, director of the U.S. National Economic Council, said it was up to Xi to “step up and come up with new ideas,” adding that for now he couldn’t find much change in China’s approach.
But CNBC quoted Kudlow as saying the administration has restarted talks with the Chinese government “at all levels”.
A day earlier, Trump, in an interview with The Wall Street Journal, said it was “highly unlikely” he would accept Beijing’s request to hold off on Washington’s plans to boost tariffs to 25% on some $200 billion of Chinese goods, due from Jan. 1.
“The continuously shifting narrative on this isn’t helping at all,” said John Kilduff, partner at New York energy hedge fund Again Capital.
U.S. settled down 7 cents at $51.56 per barrel after rallying 2.4% earlier to $52.37 and and plumbing a session low at $50.31. WTI remains about 35% below four-year highs of nearly $77 a barrel hit in early October. On Friday alone it fell 8%, striking a 13-month low of $50.16.
U.K. , the global benchmark for oil, was up 2 cents at $60.58 per barrel by 3:10 PM ET (20:10 GMT) after a session high at $61.50 and low at $59.11. Brent remains more than 30% below four-year highs of around $87 per barrel struck early last month. On Friday, it fell more than 5%, shattering the $60 support that had been its perch since July 2017.
The trade talks aside, traders are also eager to see if the first U.S. crude stock draw in ten weeks might have happened.
Consensus shows forecasters calling for a build of around 770,000 barrels for the week ended Nov. 23, which would mark a tenth week of builds. Inventories have grown by nearly 53 million barrels over the past nine weeks.
But some analysts remained convinced that stockpiles fell last week.
“I’m thinking of a crude draw of up to 3 million barrels from a refiner ramp up in gasoline production,” said Phil Flynn, a Price Futures Group with who typically has a bullish outlook on oil. “I think we’ll see sufficient drop in gasoline and distillate products as well from real demand.”
The American Petroleum Institute will issue at 4:30 p.m. ET (21:30 GMT) a snapshot of what last week’s U.S. crude supply-demand could have been, ahead of Wednesday’s official data from the . Figures from the two have diverged in the past, with the API’s smaller sampling sometimes even getting the direction of the data – build or draw – wrong. But lately, the industry group has been more accurate on this.
Source: Investing.com
