Crude oil prices plunged sharply on Tuesday amid rising concerns about excess supply in the market and on uncertainty about the U.S. and China signing a trade deal anytime soon.
There were great hopes about a trade deal earlier on Monday after reports said officials from the two countries had discussed core issues in a high-level telephone call, and that the discussions were constructive.
However, later on in the day, a tweet from CNBC’s Beijing Bureau Chief Eunice Yoon suggested Chinese officials have grown pessimistic about the chances for a trade deal due to U.S. President Donald Trump’s reluctance to roll back tariffs.
West Texas Intermediate Crude oil futures for December ended down $1.84, or 3.2%, at $55.21 a barrel.
On Monday, WTI crude oil futures ended down $0.67, or about 1.2%, at $57.05 a barrel.
The Trump administration’s reluctance to roll back tariffs on Chinese goods has raised uncertainty about a trade deal and also raised concerns about energy demand outlook once again.
OPEC members and allies are set to meet in December to discuss extending output cuts beyond March 2020 and also consider deepening the cuts.
Meanwhile, the recent report from Energy Information Administration said U.S. shale output is likely to climb by 49,000 barrels a day in December.
The American Petroleum Institute is scheduled to release its weekly oil report later in the day.
The Energy Information Administration will release the weekly inventory data Wednesday morning.
The material has been provided by InstaForex Company – www.instaforex.com