West Texas Intermediate oil futures were down 28 cents, or 0.47% to $58.92 a barrel, having risen about 7% last week on the prospects for lower production from ‘OPEC+’, which is made up of the Organization of the Petroleum Exporting Countries (OPEC) and associated producers including Russia.
Brent futures were down 21 cents, or 0.3%, at $64.18 per barrel by 0220 GMT, after gaining about 3% last week on the news that OPEC and its allies would deepen output cuts.
Monday’s sudden chill came after customs data released on Sunday showed exports from the world’s second-biggest economy in November fell 1.1% from a year earlier – a sharp reversal from expectations for a 1% rise in a Reuters poll.
The weak start to the week came despite data showing China’s crude imports jumped to a record, revealing just how deep jitters are embedded in the market over the U.S.-China trade row that has stymied global growth and oil demand.
The sagging export data is “a casualty again of the protracted trade war,” said Stephen Innes chief Asia market strategist at AxiTrader.
Washington and Beijing have been trying to agree a trade deal that will end tit-for-tat tariffs, but talks have dragged on for months as they wrangle over key details.
Monday’s declines also went against signs on Friday that China was easing its stance on resolving its trade dispute with the United States, confirming on Friday that it was waiving import tariffs for some soybean and pork shipments.
The price drops also put an end to a strong run in previous sessions fuelled by hopes for the OPEC+ production curb deal.
On Friday, those producers agreed to deepen their output cuts from 1.2 million barrels per day (bpd) to 1.7 million bpd, representing about 1.7% of global production.
“What made the announcement constructive … was the fact that Saudi Arabia said it will produce around 400,000 bpd below its new quota level,” ING Economics said in a note.
“This would effectively take OPEC+ cuts to 2.1 million bpd,” ING said.
Still, U.S. production has surged since the OPEC+ cuts were first introduced in 2017 in an attempt to drain a supply glut that had long weighed on prices. American output has risen even as the drill count has fallen, reflecting more efficient well extraction.
Energy services firm Baker Hughes said in its closely watched weekly drilling report on Friday that the U.S. drill count fell in the week to Dec. 6 – a seventh week of decline.
Drilling companies cut five oil rigs, leaving a total of 661, the lowest since April 2017.