Oil Prices Drift Lower After Strong Rally

Oil prices fell on Monday amid growth worries, though the downside remained limited amid signs of progress in China-U.S. trade talks and speculation that OPEC and its allies would consider deeper production cuts when they meet in December.

Benchmark Brent crude dropped 0.8 percent to $61.53 a barrel, after having climbed over 4 percent last week to post its best weekly gain since Sept. 20.

West Texas Intermediate (WTI) crude futures were down 0.45 percent at $56.41 a barrel, after surging more than 5 percent last week.

Oil prices are declining today as weak data out of China fueled worries over energy demand.

Official data showed that China’s industrial profits declined at a faster pace in September as producer prices continued to fall.

Industrial profits decreased 5.3 percent year-on-year, after easing 2 percent in August, reflecting faster fall in industrial product prices and slower rise in sales.

On the positive side, investors cheered signs of progress in the prolonged U.S.-China trade spat.

The Office of the U.S. Trade Representative said the countries have “made headway on specific issues and the two sides are close to finalizing some sections of the agreement.”

On Saturday, China’s Commerce Ministry said both sides are “close to finalizing” some parts of a trade agreement after high-level telephone discussions on Friday.

U.S. President Donald Trump said he hopes to sign the deal with China’s President Xi Jinping next month at a summit in Chile.

Meanwhile, Russia’s energy ministry said on Friday it is continuing close cooperation with Saudi Arabia, OPEC and non-OPEC oil producers to enhance market stability and predictability.

The material has been provided by InstaForex Company – www.instaforex.com