Oil dips on worries U.S.-China trade deal could slip to next year

By Koustav Samanta
SINGAPORE, Nov 21 (Reuters) - Oil prices retreated on
Thursday as a spat over Hong Kong added to worries of a delay in
any U.S.-China trade deal, after posting steep gains in the
previous session on bullish U.S. crude inventory data.
The trade war between the world's two biggest economies has
dominated the outlook for future oil demand, and trade experts
have warned the completion of a "phase one" U.S.-China trade
deal could slip into next year.
Brent crude futures LCOc1 fell 25 cents, or 0.4%, to
$62.15 a barrel by 0138 GMT. The international benchmark rose
2.5% on Wednesday.
West Texas Intermediate (WTI) crude futures CLc1 dropped
20 cents, or 0.4%, to $56.81 per barrel. U.S. crude closed up
3.4% in the previous session.
"The trade talks are driving prices. I think you can draw a
straight line vector between the price of oil and sentiment
around trade," said Stephen Innes, market strategist at
AxiTrader.
"I view the (U.S.-China) deal as massive. A trade deal would
allow held-back business investment decisions to move forward
and possibly turn around the faltering momentum in Indian oil
import demand, which could soak up a large portion of the supply
glut."
Among the latest trade row hurdles, China condemned a U.S.
Senate bill aimed at protecting human rights in Hong Kong, while
U.S. President Donald Trump said he is inclined to raise tariffs
on Chinese imports if a trade deal is not reached. A big drawdown of crude stocks at the U.S. delivery hub of
Cushing, Oklahoma, however, propelled oil prices higher on
Wednesday.
Crude stocks at the Cushing fell by 2.3 million barrels,
while U.S. crude inventories rose by 1.4 million barrels in the
week to Nov. 15, compared with expectations for an increase of
1.5 million barrels, data from the Energy Information
Administration showed. Russian President Vladimir Putin said on Wednesday that
Russia and OPEC have 'a common goal' of keeping the oil market
balanced and predictable, and Moscow will continue cooperation
under the global supply curbs deal. The Organization of the Petroleum Exporting Countries (OPEC)
meets on Dec. 5 in Vienna, followed by talks with a group of
other exporters, including Russia, known as OPEC+.