Oil prices decline fearing US-China trade war

Oil prices fell on Tuesday as Washington put more Chinese companies on a blacklist, dampening hopes of a trade deal between the two countries, although unrest in Iraq and Ecuador provided some support for crude prices.

Earlier in the session, Brent crude and West Texas Intermediate rose more than 1%. On the settlement, Brent fell 11 cents, or 0.2%, to $58.24 a barrel, while WTI fell 12 cents, or 0.2%, to $52.63.

Investors are cautious ahead of US-China trade talks in Washington on Thursday. US President Donald Trump said a trade deal was unlikely soon.

Bloomberg reported that Washington was moving ahead with discussions on possible restrictions on capital flows to China, with a focus on US government pension fund investments.

The US Energy Information Administration cut its forecast for global oil demand growth in 2020 by 100,000 bpd to 1.30mn bpd.

Jim Ritterbusch, president of Ritterbusch & Co., said in a note that the oil market “will be forced to focus more concisely on the deterioration of global oil demand, while the monthly series of reports for the rest of the week is likely not to rule out a rapid price shift towards the rise”.

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