Oil prices extend losses as weak China data compounds US-China trade deal doubts

Oil prices dropped again on Tuesday after falling heavily in the previous session, as weak Chinese economic data for September added to lingering concerns about the feasibility of the US-China trade deal announced by President Trump late last week.

Brent crude futures LCOc1 fell 30 cents, or 0.5 per cent, to USD 59.067 barrel by 0142 GMT, while US West Texas Intermediate (WTI) crude futures CLc1 was at USD 53.38 a barrel, down 21 cents or 0.4 per cent.

“China’s exports and imports shrunk more than expected in September, as ongoing tariffs and a slowdown in global trade undercut demand,” analysts at ANZ bank wrote in a research note.

Doubts over the agreement between Washington and Beijing, designed to end a brutal trade war between the world’s top two economies, also kept sentiment weak, ANZ said. The US-China dispute has cast a shadow on global economic growth prospects, and left question marks over future oil demand.

A slide in China’s exports picked up pace in September, while imports contracted for a fifth straight month, pointing to further weakness in the economy and underlining the need for more stimulus as the US-China trade war drags on.

The impact was enough to outweigh any support that prices might have received from geopolitical tensions surrounding the Middle East.

On Monday President Trump imposed sanctions on Turkey demanded the NATO ally stop a military incursion in northeast Syria that is rapidly reshaping the battlefield of the world’s deadliest ongoing war.