Oil prices edged lower on Tuesday as lingering worries over a global economic slowdown that could hurt demand offset some signs of progress in U.S.-China trade talks.
The U.S. President Donald Trump had on Monday said efforts to end a U.S. trade war with China were going well as negotiators from the two nations work to nail down a Phase 1 trade deal text for their leaders to sign next month when they meet at November’s APEC summit.
“Commodity markets were cautiously optimistic amid signs that a trade deal was close to being signed by the United States and China. Crude oil prices remained in the doldrums, with ongoing economic weakness weighing on sentiment,” ANZ bank said in a note.
Although there are some signs of easing tensions between the world’s two largest economies, U.S. Commerce Secretary Wilbur Ross said on Monday that an initial trade deal does not need to be finalised next month, emphasising the need to get the right deal.
Adding to tensions, China is seeking $2.4 billion in retaliatory sanctions against the United States for non-compliance with a WTO ruling in a tariffs case dating back to the era of President Barack Obama.
“In the short term, a possibility of the United States and China signing an initial deal could support prices, but it remains to see whether tariffs set for December will be removed,” said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul.