Oil futures slumped Friday as skepticism around a rollback of tariffs in China-U.S. trade talks eroded bullish sentiment on crude prices.
West Texas Intermediate crude for December delivery CLZ19, -1.57% fell 85 cents, or 1.5%, to $56.30 a barrel on the New York Mercantile Exchange, after a 1.4% rally. For the week, U.S. benchmark oil prices are on track to climb 0.3%, according to FactSet data.
January Brent crude BRNF20, -1.64%, the international benchmark, shed 91 cents, or 1.5%, to $61.38 a barrel on ICE Futures Europe, following a 0.9% gain on Thursday. For the week, Brent is set to decline 0.4%.
Reports Thursday and Friday signaled that there was “fierce internal opposition” in Washington over a new accord with Beijing to cancel tariffs in stages. Trade conflicts between the world’s largest economies have been at the heart of concerns about demand for crude amid a global slowdown.
On top of that, recent inventory reports indicate that supplies are rising faster than uptake.
The Energy Information Administration on Wednesday reported that U.S. crude supplies rose a second straight week, up 7.9 million barrels for the week ended Nov. 1.
“Oil prices are soft on Friday as some trade doubts grow and after failing to take out some key technical levels this week,” wrote Edward Moya, senior market analyst at brokerage Oanda, in a note.
“Oil seems like it could be stuck in a range until we get a final phase-one trade deal and get passed the December 5-6th OPEC + meetings,” referring to the gathering of the Organization of the Petroleum Exporting Countries and major suppliers like Russia set to take place next month.
Looking ahead, investors await a weekly report from Baker Hughes on rigs drilling for oil, with the oil-field services firm reporting last week that the number of rigs drilling for oil fell by 5 to 691.