LONDON/SINGAPORE (Reuters) - Oil prices edged lower on Thursday as fresh tensions between the United States and China over protests in Hong Kong fueled concern that a deal to end a trade war between the world’s top two economies may be further delayed.
Brent crude LCOc1 fell 44 cents, or 0.7%, to $61.96 a barrel by 0951 GMT, while West Texas Intermediate crude CLc1 was down 36 cents, or 0.6%, at $56.65.
Both benchmarks had risen strongly on Wednesday due to bullish data on U.S. crude inventories.
U.S. President Donald Trump is expected to sign two bills passed by Congress intended to support protesters in Hong Kong. That followed a Reuters report that completion of a “phase one” U.S.-China trade deal could slide into next year.
The potential delay could mean the U.S. administration will implement new tariffs on imports from China, escalating the tensions, experts say.
“Under this scenario, both equities and oil are expected to come under pressure. As talks hit a snag, an upside breakout from the current trading range all of a sudden has become less imminent,” Tamas Varga of oil brokerage PVM said.
However, in an attempt to allay fears, the Chinese commerce ministry said on Thursday that China would strive to reach a “phase one” trade agreement with the United States as both sides kept communication channels open.
On Wednesday, data from the U.S. government’s Energy Information Administration showed U.S. crude stocks had risen by a less-than-expected 1.4 million barrels in the week to Nov. 15.
Russian President Vladimir Putin said Russia and producer group OPEC had “a common goal” of keeping the oil market balanced and predictable, and Moscow would continue cooperation under a global deal cutting oil supply.
“Russian commitment on an extended supply-curb deal, though supportive of oil prices, will continue to struggle against headwinds on global trade issues,” said Benjamin Lu, analyst at Singapore-based brokerage Phillip Futures.
The Organization of the Petroleum Exporting Countries meets on Dec. 5 in Vienna, followed by talks with allied oil producers including Russia.
Petroleum Association of Japan President Takashi Tsukioka said OPEC and other producers were likely to extend their deal to cut output by 1.2 million barrels per day.
