Oil price on Tuesday was sold below $62 per barrel, its second fall since the beginning of the week which is caused by weak optimism that is emanating from the United States and China in not finding a truce in the nearly a year-long trade war.
The global oil benchmark, Brent crude traded low at $61.55 a barrel losing 89 cents as against it had $63.65 since September 24 2019, the highest so far. Meanwhile, West Texas Intermediate (WTI) crude also dropped to $56.08 loosing 97 cents.
According to a Chinese government official, he said that there is still uncertainty from the side of Xi Jinping’s government and that to some extent crippled global economic growth and also forcing weak projections on oil demand.
Another major cause of the hit is the unprecedented production increase from the Norwegian production output and according to a group of industry analysts they made projections that the U.S. crude inventories could rise further by 1.1 million barrels in mid-November, 2019, the fourth time in a roll and that has helped to cushion supply deficits a little bit.
The Norwegian October output rose beyond the official projection as the Johan Sverdrup oil field started production ahead of schedule.
Craig Erlam, industry analyst said that the activities coming from China on the trade dispute has led to the retrieval of oil prices.
Erlam said, “The less than promising reports coming from China on the trade war may have taken some of the energy out of the rally, we’re certainly seeing less momentum in the recent rallies.”
Oil prices were also hit by a larger than expected rise in the Norwegian oil production and the prospect of a further increase in U.S. crude inventories, suggesting ample supplies.
As the political protest in Iraq lingers, the White House has announced that it has lifted the sanction on Iraq on the Fordow nuclear plant.
Meanwhile, supply support came from members of the Organization of Petroleum Exporting Counties (OPEC) doused geopolitical tension in the Middle East, Saudi Arabia.