Global oil prices fall as Chinese exports shink again in November
Oil prices fell this morning, after China’s exports of goods and services shrank for the fourth month in a row.
Brent futures were down 0.5 per cent, at $64.03 per barrel, after gaining about three per cent last week after news that OPEC and allies would increase output cuts.
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West Texas Intermediate futures were down 0.5 per cent to $58.79 a barrel.
The fall came after customs data released on Sunday showed exports from the world’s second-biggest economy fell 1.1 per cent in November compared to a year earlier.
It came despite data showing China’s crude imports jumped, showing how deep market jitters are over the trade war between the US and China that has limited global growth and oil demand.
The sagging export data is “a casualty again of the protracted trade war,” said Stephen Innes chief Asia market strategist at AxiTrader.
Washington and Beijing have been trying to agree a trade deal that will end tit-for-tat tariffs, but talks have dragged on for months as they wrangle over key details.
Separately, Goldman Sachs raised its oil price forecasts for next year, citing tighter-than-expected inventories after the move to deepen output cuts from OPEC.
“We are increasing our forecast for backwardation in 2020 although our long-term marginal cost forecast remains unchanged,” Goldman analysts wrote in a note.
The bank revised its Brent spot price forecast to $63 per barrel for 2020, up from a previous estimate of $60, while it also increased West Texas Intermediate (WTI) spot price outlook to $58.50 per barrel from $55.50.
Oil producers led by Saudi Arabia and Russia, agreed on Thursday to cut output by an extra 500,000 barrels per day (bpd) in the first quarter of 2020 but stopped short of pledging action beyond March.
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The decision, “crystallizes an important shift in OPEC+ behavior to managing short-term physical surpluses and deficits rather than trying to correct perceived long-term imbalances through open-ended commitments,” the Wall Street bank said.
“These revisions lead us to forecast a broadly balanced 2020 global oil market, 0.3m bpd tighter than our previous forecast.”