Dec. 10 (UPI) — Crude oil prices fell early Monday as China-related tensions weighed on the market, while the impact of the OPEC plus production cut announced last week was offset by concern about U.S. rising output.
West Texas Intermediate front-month futures fell 1.5 percent to $51.83 per barrel as of 10:16 a.m. EST, while Brent crude futures were 0.8 percent lower, at $61.17, at about the same time.
“Oil has opened the week lower as U.S.-China trade tensions continue to weigh on the market, negating last Friday’s OPEC plus production cut news,” Nicholas Cawley, analyst at DailyFX, told UPI.
There are concerns related to last week’s arrest in Canada, requested by the United States, of the chief financial officer of Huawei Technologies Co., Meng Wanzhou. China has strongly protested it.
Traders fear the arrest, on grounds she may have violated U.S. sanctions against Iran, could damage the already difficult trade relations between the United States and China, which started the year with a series of tariffs and countertariffs.
There are worries that trade disputes between the world’s two leading economies could have ripple effects worldwide and lead to reduced global economic activity. This would hurt crude oil demand and contribute to views that the market is oversupplied, traders have said.
After the OPEC plus announcement on Friday of a 1.2 million barrel in production cut, generally in line with expectations of cuts between 1.1 million and 1.4 million following recent plunges in crude oil prices, concerns that the market may still be oversupplied lingered.
“The near-term outlook for oil remains cloudy however as U.S. supply continues unabated, confirmed by news at the end of last week that for the first time in 75 years, America became a net oil exporter,” Cawley added.
Future movement will remain sensitive to any development.
“Technically the charts are neutral, leaving oil trapped in a trading range and needing a fresh stimulus for any break-out to succeed,” Cawley said.