Benchmark crude oil prices declined on markets in New York and London on Mar. 8 following comments that officials from the US and China have yet to schedule a summit to resolve their trade dispute (OGJ Online, Mar. 8, 2019).
Terry Branstad, US envoy to Beijing, said negotiators continue trying to work out differences, including details on enforcement of any eventual deal. While saying progress has been made in the ongoing trade talks, Branstad also said more progress is needed before a summit date is set.
“The market is concerned about the economic outlook and that’s weighing on risk assets,” said Giovanni Staunovo, UBS Wealth Management analyst. “There is a recession risk, which could hurt oil demand.”
Also last week, the European Central Bank cut its 2019 growth forecast to 1.1% from 1.7%. Previously, the Organization for Economic Cooperation and Development downgraded its growth forecasts for the G20.
Chinese government data said China’s February exports dropped 20.7% compared with the same time a year ago. Oil prices came under downward pressure because China’s export figures were weaker than expected, analysts said.
Separately, Baker Hughes reported the US drilling rig count is down 11 units to 1,027 rigs working for the week ended Mar. 8. The count is up 43 units from the 984 rigs working this time a year ago (OGJ Online, Mar. 8, 2019).