Oil down despite reports of faster trade deal

Oil prices continued to slide on Tuesday in Asia despite reports that China and the US, the world’s biggest oil importers, are close to signing a “phase one” partial trade deal.

US President Donald Trump said he expected to sign a significant part of the planned US trade deal “ahead of schedule,” while the Office of the US Trade Representative (USTR) said Washington is considering extending certain tariff exclusions on $34 billion of Chinese imports.

Earlier reports said leaders from the two nations might officially sign the phase one agreement next month in Chile.

The positive trade development lifted US stocks overnight, but did not provide much support to the oil markets today.

US Crude Oil WTI Futures fell 0.4% to $55.57 by 12:31 AM ET (04:31 GMT), while International Brent Oil Futures traded 0.9% lower to $61.02.

Weak China data were cited as headwind for the oil markets this week. Profits at Chinese industrial companies fell for the second straight month in September as producer prices continued their slide, data showed on Monday, highlighting the impact of the slowing economy and protracted US trade war on corporate balance sheets.

Looking ahead, traders now await the weekly US inventory data. The American Petroleum Institute releases industry data later on Tuesday, while the US government’s Energy Information Administration releases inventory data on Wednesday.

Total US crude inventories were forecast to have increased by around 700,000 barrels last week.