Trump's Latest Trade War Comment Puts Oil Prices Under Pressure

Andrew Cummings
November 12, 2019

Positive sentiment surrounding the trade war was previously supported by comments from officials in both countries, who said that the first phase of a trade deal could see tariffs rolled back.

In fact, President Trump poured could water on Friday over (exaggerated?) optimism surrounding the "Phase One" deal with China, stressing that there is still no decision on any roll over existing tariffs. Last week, USA and Chinese officials confirmed that they had made substantial progress on a deal and had reached a "consensus of principles", with Trump telling reporters that he would like to see the deal demonstratively signed somewhere in the U.S., possibly in Iowa, by himself and Chinese President Xi Jinping.

Shares of Cisco Systems Inc dropped 1.4 per cent as Piper Jaffray cut its rating on the network gear maker to "neutral" from "overweight".

US retail sales on Friday are forecast to rebound in October after unexpectedly falling the prior month. Equities across the globe fell on Monday on escalating violence in Hong Kong. "Longer-lasting and more meaningful market trends would rely more heavily on trade talks between U.S. and China", Singapore-based Lim told Al Jazeera. On the negative side, another significant build in United States crude oil supplies have dented the mood among traders in line with downbeat headlines from the OPEC+ event next month. The S&P 500 Index fell 0.2%.

"I haven't agreed to anything", Trump said, after saying that China would like to get "somewhat of a rollback, not a complete rollback, 'cause they know I won't do it".

Also weighing down on traders' mood today, the OPEC+ has practically ruled out deeper oil output cuts at its meeting in December, although the cartel will probably extend further the onging agreement. That was the fifth straight week of gains for the index, which matches its longest winning streak in the last two years.

The Dow Jones Industrial Average fell 100.58 points, or 0.36 per cent, at the open to 27,580.66. The S&P and Nasdaq stilll ended down, but well off the lows.

Walt Disney jumped 3.8% for one of the biggest gains in the S&P 500 after it reported stronger profit for the latest quarter than expected, thanks in part to its "Toy Story 4 " and "The Lion King" movies. It also announced the resignation of its CEO, Art Peck.

US crude was 63 cents, or 1.1%, lower at $56.61 a barrel, having risen 1.9% last week.

The yen traded at 109.08 per dollar, little changed.The offshore yuan was steady at 7.0040 per dollar.The euro was at $1.1035.The British pound traded at $1.2863 after jumping 0.6% Monday.

In other trading, benchmark crude oil lost 75 cents to $56.49 U.S. a barrel in electronic trading on the New York Mercantile Exchange while Brent crude oil, the global standard, lost 70 cents to $61.81 per barrel. The euro rose to $1.1026 from $1.1021.

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