Crude oil futures were lower during mid-morning trade in Asia Friday as conflicting signals emerged from ongoing trade talks between the US and China, while the possibility of OPEC extending its production cut agreement stemmed further losses. At 10:15 am Singapore time (0215 GMT), ICE January Brent crude futures were down 35 cents/b (0.55%) from Thursday’s settle at $63.62/b, while the new front-month NYMEX January light sweet crude contract was 36 cents/b (0.61%) lower to $58.58/b.
“Mixed headlines on US-China once again reach our shores, providing a lack of strong impetus for Asia markets going into the end of the week,” said IG market strategist Pan Jingyi. According to media reports, the Phase One deal between the US and China many now not be completed until next year. However, Chinese vice premier Liu He has invited invited US trade representative Robert Lighthizer to China for further talks later in the month and December tariffs were likely be postponed, according to analysts quoting media reports.
“Markets continued to face conflicting trade talk signals as China’s vice premier Liu He said he is “cautiously optimistic” about agreeing a phase one deal with the US,” said Mizuho Bank senior economist Vishnu Varathan. However Pan Jingyi noted: “That said, the likelihood of having a deal signed by year end still looks very uncertain with the slew of mixed news we have had so far.”
Reports of a possible extension of OPEC supply cuts to June 2020 provided some support to crude prices, analysts said.