Oil prices fall; all eyes on G-20, OPEC meetings

LONDON, June 28, 2019 – Oil prices dropped on Friday in Asia as traders remained wary of the outcomes of meetings Chinese leader Xi Jinping, Russia President Vladimir Putin of Russia and Saudi Arabia Crown Prince Mohammed bin Salman have with U.S. President Donald Trump at the G-20 summit.

U.S. Crude Oil WTI Futures fell 0.4% to $59.17 by 12:23 AM ET (04:23 GMT). International Brent Oil Futures also dropped 0.4% to $65.41.

Trump is scheduled to meet Putin in Osaka on Friday. He is scheduled to have breakfast with Salman on Saturday and meet later in the day with Xi.

On the Sino-U.S. trade front, the U.S. has been sending out mixed signals on the likely outcome of the talks between Xi and Trump tomorrow.

The U.S. President said last week that he had a “very good” phone call with his Chinese counterpart, but warned this week that he would impose more tariffs on Chinese goods if trade talks do not progress well this weekend.

Investor sentiment improved somewhat after the South China Morning Post reported Thursday that Washington and Beijing have “tentatively agreed” on a truce, before U.S. Trade Representative Robert Lighthizer said a balanced deal with China will not happen because of various violations of intellectual property in the past.

Meanwhile, The Organization of Petroleum Exporting Countries (OPEC) and some non-members will meet early next week to discuss extending production cuts that have been in place since Janaury 1.

“The market sentiment is that OPEC+ will agree to extend cuts, but after all what matters is how deep the cuts will be and how much Saudi Arabia and Russia will curb,” said Kim Kwang-rae, a commodity analyst at Samsung (KS:005930) Futures in Seoul, in a Reuters report.

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