This post was originally published on this site
Oil futures edged lower in quiet trade Monday, as bulls struggle to build on gains seen last week on rising optimism over prospects for a so-called phase one U.S.-China trade deal.
West Texas Intermediate crude for December delivery CLZ19, -0.19% fell 9 cents, or 0.2%, to $57.63 a barrel on the New York Mercantile Exchange, while January Brent crude BRNF20, -0.24% was off 16 cents, or 0.3%, at $63.14 a barrel.
WTI crude hit an eight-week high above $58 a barrel in earlier action, but pulled back after clashes between students and police in Hong Kong intensified, analysts said.
Overall, oil appears to be correlating with the equity market, said Robert Yawger, director of energy at Mizuho Securities U.S.A. Major U.S. equity indexes ended at records on Friday.
“Both risk assets have posted gains in recent weeks on China trade, which has served as a positive demand indicator,” Yawger said. WTI futures have “rallied despite a flood of supply, with the EIA domestic production number up 200,000 [barrels] last week to an all-time record 12.8 million.”
Chinese state media outlet Xinhua over the weekend said Chinese Vice Premier Liu He, the country’s top trade negotiator, held a phone conversation with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Saturday, describing the discussions as “constructive.”
Meanwhile, China’s central bank on Monday lowered the interest rate on its regular reverse repurchase open market operations for the first time since October 2015 in an effort to boost market confidence and buoy slowing growth.
In other energy trade, December gasoline RBZ19, -0.39% was off 0.4% at $1.6284 a gallon, while December heating oil HOZ19, -0.42% was off 0.4% at $1.9395 a gallon.
December natural-gas futures NGZ19, -3.65% fell 3.8% to $2.586 per million British thermal units.
