United States oil inches down amid concerns of economic slowdown

Andrew Cummings
January 14, 2019

Treasury Secretary Steven Mnuchin announced that Chinese Vice Premier Liu He will "most likely" visit Washington on January 30 and 31 to meet with his U.S. counterparts, including U.S. Trade Representative Robert Lighthizer, reports Reuters. Hong Kong's Hang Seng shed 0.3 percent to 26,394.06, while the Shanghai Composite index was flat at 2,545.05.

"If you want to gauge how investors are viewing the trade talks, just watch tech, and semiconductors in particular", said Jack Ablin, chief investment officer at Cresset Wealth Advisors in Chicago.

Trade talks in Beijing between the world's two biggest economies entered the third day on Wednesday, amid signs of progress on issues including purchases of United States farm and energy commodities and increased USA access to China's markets. Minutes of the meeting, which were released a day earlier, showed the officials believed that the central bank could afford to be "patient" with rate hikes, given volatile stock markets, trade tensions and shaky global growth.

Heightened risk appetite boosted U.S. Treasury yields to the highest this year, while the U.S. dollar extended losses after minutes from a December 18-19 Federal Reserve policy meeting showed many Fed policymakers said the central bank could be patient on future rate hikes.

At the start of trading on Wednesday, crude oil prices were up around 1 percent through OPEC curbing oil production and with the ongoing trade talks between the USA and China generating investor optimism. He echoed the tone of Fed officials who were present at a meeting last month.

Trump, a Republican, has accused China of cheating the United States on trade and stealing USA intellectual property, though he often has said he has a good personal rapport with Xi.

Both oil price benchmarks had jumped by around 5 percent the previous day as financial markets around the world surged on the hopes that Washington and Beijing may be able to soon end their trade disputes, soothing fears of an all-out trade war between the two biggest economies and its possible impact on global growth. China's producer prices in December rose at their slowest pace in more than two years, a worrying sign of deflationary risks.

Optimism that the trade standoff would be resolved also lifted oil prices.

Disappointing data from China added to concerns about the global economy.

Bond prices slipped. The yield on the 10-year Treasury note rose to 2.74 percent from 2.72 percent. It added 23 cents to $52.94 per barrel on Thursday. It climbed 4.6 percent to $61.44 a barrel in London.

CURRENCIES: The dollar eased to 108.38 yen from 108.43 yen late Thursday.

Worldwide benchmark Brent crude traded at $61.84 per barrel at 11.57 GMT on Friday while the price of American benchmark West Texas Intermediate (WTI) was $52.87 per barrel at the same time. The euro rose to $1.1559 from $1.1543.

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