(Bloomberg) -- Crude fell for a second day amid a weakening global growth outlook and abundant crude supplies in the world’s largest economy.
Futures slid 1.5% in New York on Tuesday. Hopes for a resolution of key issues in the U.S.-China trade dispute are fading, souring prospects for a revival in energy demand. Meanwhile, the International Monetary Fund cut its 2019 global growth forecast for a fifth time.
“There are still U.S.-China trade talks and demand concerns” that are weighing on the market, said Michael Hiley, head of OTC energy trading with LPS Partners.
Aside from the U.S.-China trade war, investors are also focused on supply increases in the U.S. The Energy Information Administration sees crude output at major shale plays across the U.S. rising 58,000 barrels a day to 8.97 million barrels a day in November.
West Texas Intermediate for November delivery fell 78 cents to settle at $52.81 a barrel on the New York Mercantile Exchange.
Brent crude for December settlement inched down 61 cents to end the session at $58.74 a barrel on the London-based ICE (NYSE:ICE) Futures Europe Exchange, and traded at a premium of $5.86 to WTI for the same month.
Beijing wants a rollback in tariffs in its trade war with the U.S. before China can feasibly agree to buy as much as $50 billion of American agriculture products that President Donald Trump claims are part of an initial deal, people familiar with the matter said.
Meanwhile, in the U.S., crude inventories probably rose for a fifth straight week. That would be the longest stretch of increases since February. Analysts in a Bloomberg survey see stockpiles increasing 3 million barrels. The Energy Information Administration is scheduled to release its weekly inventory report on Thursday.
“The market has plenty of supply in the short-term,” said Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago. Investors are “expecting a big increase in supply this week because the refinery runs are so low.”
