WASHINGTON (DTN) -- New York Mercantile Exchange oil futures and Brent crude on the Intercontinental Exchange edged higher in early trade Monday on concern deadly antigovernment protests in Iraq may disrupt supply from the Organization of the Petroleum Exporting Countries' second largest producer, while the market eyes the resumption in U.S.-China trade talks this week.
Around 8 a.m. ET, NYMEX November West Texas Intermediate futures were up $0.63 near at $53.44 per barrel (bbl), while ICE December Brent gained $0.57 near $58.94 bbl. NYMEX November ULSD futures rallied 1.64 cents near $1.9109 gallon and the November RBOB contract was up 0.5 cents at $1.5784 a gallon.
Oil futures edged higher at the start of the new trading week, as U.S. and Chinese officials prepare to meet in Washington Thursday and Friday (Oct. 10-11) in a fresh effort to reach a trade deal.
Bloomberg reported this weekend that Vice Premier Liu He, who will lead the Chinese trade delegation indicated he would bring an offer to Washington that skips the key issues of reforming China's industrial policy or intellectual property law. By narrowing the scope of the agreement, however, Beijing doesn't address key issues in the yearlong trade spat between the world's two largest economies. U.S. President Donald Trump reiterated Sunday that the deal must be 100% in favor of the United States, while also saying there is a "a very good chance" of a deal.
The new round of trade talks follows last week's dismal economic data from both the United States and China, indicating continued deceleration of growth in manufacturing and service sectors. Crude contracts ended last week with more than 5% declines, pressed lower by growing concern worsening relations between the world's top economies would further undermine the global economy, which weighs on the demand outlook for oil.
Markets will get a fresh look at demand projections this week with monthly reports from Energy Information Administration and International Energy Agency, as well as OPEC's Monthly Oil Market Report.
Separately, OPEC considers it premature to deepen production cuts despite lower oil prices, according to the cartel's secretary general, Mohammed Barkindo. OPEC official said the group is now focused on boosting compliance with the quotas under the current agreement.
Meanwhile, deadly antigovernment protests in OPEC's second largest producer, Iraq escalated further this weekend, gripping the southern provinces that account for roughly one-third of national output. The six days of protests threaten to disrupt 3.43 million barrels per day (bpd) of exports from Iraq's Basra terminals, if violence escalates further. Iraq's officials said Sunday that 104 people have been killed and more than 6,100 wounded. The situation remains fluid.
Liubov Georges can be reached at email@example.com
© Copyright 2019 DTN/The Progressive Farmer. All rights reserved.