Oil prices dipped on Wednesday as prospects for a trade deal between the United States and China dimmed, weighing on the outlook for the global economy and energy demand. U.S. President Donald Trump said on Wednesday that the two countries were close to finalizing a trade deal, but he fell short of providing a date or venue for the signing ceremony, disappointing investors.
Brent crude futures LCOc1 edged down 18 cents, or 0.3%, to $61.88 a barrel by 0411 GMT, while U.S. West Texas Intermediate crude CLc1 was at $56.67, down 13 cents or 0.2%. A forecast by the International Energy Agency for slower global oil demand growth post-2025 also weighed on the market. Global oil demand is expected to grow by 1 million barrels per day (bpd) on average to 2025, but is forecast to slow to 100,000 bpd a year from then on as fuel efficiency improves and more electric vehicles hit the road, the IEA said in its annual World Energy Outlook for the period to 2040.
The share of global oil production by members of the Organization of the Petroleum Exporting Countries (OPEC) and Russia is seen falling to 47% for much of the next decade, a level not seen since the 1980s. ANZ analysts said the prospects for U.S. crude exports had turned bleak after shipping rates jumped last month, causing inventories to stay above both last year’s level and the five-year average. The American Petroleum Institute (API) is scheduled to release its data for the latest week at 4:30 p.m. EST (2130 GMT) on Wednesday, while the weekly report from the U.S. Energy Information Administration (EIA) is due at 11:00 a.m. EST on Thursday.