Oil down on possible US trade sanctions against China
LONDON, May 29, 2020 – Oil was down on Friday morning in Asia, giving up some of its gains from the previous session.
Brent oil futures were down 0.78% to $35.77 by 9:40 PM ET (2:40 AM GMT) and WTI futures slid 1.13% to $33.33.
WTI futures rose 2.7% during the previous session on optimism over the global demand recovery as countries emerged from Covid-19 lockdowns.
Investor sentiment soured due to mounting US-China tensions after China’s National People’s Congress passed a draft decision to enact national security laws in Hong Kong on Thursday. US President Donald Trump will unveil his response to the laws at a press conference on Friday.
Potential US actions could include trade sanctions, which would impact the demand that has slowly been recovering from the lockdowns. Demand recovery will also be compounded by some countries continuing to report new second-wave outbreaks, with the number of global Covid-19 cases approaching 6 million.
Investors will be also looking to the decisions made during OPEC’s June meeting in less than two weeks to see whether Russia agrees to continue cuts in production until the end of the year.
Meanwhile, the US Energy Information Administration (EIA) announced on Thursday a surprise build of 7.928 million barrel for the week ending May 22. Analyst forecasts prepared by Investing.com predicted a 1.944 million-barrel draw.
EIA’s estimates followed the American Petroleum Institute (API)’s estimate of an 8.7 million-barrel build earlier in the week.
By Investing.com: https://www.investing.com/news/commodities-news/oil-down-on-back-of-possible-us-trade-sanctions-against-china-2186108