Oil prices still near 12-week high despite drop

Oil prices dropped on Monday in Asia but are still near 12-week highs after <a href=’https://staging.theenergyyear.com/companies-institutions/opec/’>OPEC+ agreed to bigger output cuts than expected.

US Crude Oil WTI Futures lost 0.5% to $58.91 by 11:20 PM ET (03:20 GMT), while International Brent Oil Futures dropped 0.3% to $64.19.

During Friday’s meeting, Saudi Arabia agreed to provide 400,000 bpd of their own cuts, a significant supply cut beyond what was agreed to with fellow OPEC+ members, if OPEC+ averaged its part of 1.7 million bpd through the first quarter of 2020. Crude prices surged on the news, with the US WTI jumping 7.3% on the week. It was WTI’s largest weekly gain since mid-June. UK Brent gained 3.1% on the week.

Goldman Sachs raised its 2020 Brent forecast following the move, adding that it sees a change in OPEC+ strategy to managing short-term physical imbalances.

Oil prices retreated today as data showed exports in China declined for the fourth consecutive month, raising concerns that demand for oil might fall.

The data came as Beijing and Washington aim to reach a “phase one” trade deal that has so far remained elusive ahead of a Dec. 15 deadline, when additional tariffs will be imposed on Chinese goods.

The US and China are the world’s biggest oil importers.

“The soft Chinese numbers have outweighed the OPEC+ cuts, once again reinforcing the heavy focus on demand at present,” said Howie Lee, an economist at Oversea-Chinese Banking Corp in a Bloomberg report. “With just a week left before a fresh set of US tariffs kick in, there’s also a bit of apprehension in the market.”