NEW YORK - Oil prices fell more than 1% on Friday, weighed down by uncertainty about how close Washington and Beijing are to a trade deal after U.S. President Donald Trump said he has not agreed to roll back tariffs on China.
Brent crude futures fell 73 cents, or 1.2%, to $61.56 a barrel by 10:52 a.m. EST (1552 GMT). West Texas Intermediate (WTI) crude was down 74 cents, or 1.3%, at $56.41 a barrel.
Brent was headed for a weekly fall of 0.3%, its second straight weekly decline. WTI was on track to gain 0.3%.
The 16-month trade war between the world’s two biggest economies has slowed economic growth around the world and prompted analysts to lower forecasts for oil demand, raising concerns that a supply glut could develop in 2020.
Trump on Friday told reporters he has not agreed to roll back tariffs on China but that Beijing would like him to do so.
The comments come after officials from both countries on Thursday said China and the United States have agreed to roll back tariffs on each others’ goods in a “phase one” trade deal if it is completed.
It was reported on Thursday the plan faced stiff internal opposition in the U.S. administration. U.S. officials have signaled opposing views on the status of talks.
“An improved outlook for demand growth is highly dependent on a resolution of the trade skirmish,” said John Kilduff, a partner at Again Capital LLC. “The oil market has become highly reactive to the vagaries of the situation and headline risk abounds.”
Oil prices have also been under pressure since OPEC Secretary-General Mohammad Barkindo said this week that he was more optimistic about the outlook for 2020, appearing to downplay any need to cut output more deeply.
A deal between the Organization of the Petroleum Exporting Countries and allies, such as Russia, will limit supplies until March next year. The producers meet on Dec. 5-6 in Vienna to review that policy.
“Even if a partial (U.S.-China) agreement is reached, the impetus for demand will not be enough to avoid an oversupply next year, meaning that OPEC will still need to make bigger production cuts,” Commerzbank said in a note.
While customs data showed that China’s crude oil imports in October rose 11.5% from a year earlier to a record high, bearish signals elsewhere tempered the news.
U.S. crude oil stockpiles rose sharply last week as refineries cut output and exports dropped, the Energy Information Administration said on Wednesday.
Oil prices were unmoved by reports of Iranian forces shooting down a foreign drone over the port city of Mahshahr.