Beijing, January 4: The US China trade war threads have further led the crude oil prices settling stable today after China claimed to have detailed talks on 7th and 8th of January this year, over the trade disputes with Washington aiming to resolve the trade issues. Crude prices had previously fallen after the United States followed most other major economies into a manufacturing downturn.
The Institute for Supply Management (ISM) reveal that this US slowdown is the broadest since a decade in the past citing the trade war with China. The two nations have been locked in a trade war for much of the past year, disrupting the flow of hundreds of billions of dollar’s worth of goods and fuelling fears of a global economic slowdown. Falling equity prices and increasing uncertainty have started to take a toll on the world’s biggest economy.
“Led by a sharp fall in the US Institute for Supply Management and China’s Purchasing Manager’s Index falling below 50, the global manufacturing PMI fell to 51.5 in December compared to 52.8 previously, a 27-month low,” stated the ISM report. Meanwhile the US bank urged to say that “The recent run of incoming data, coupled with global tightening financial conditions, has increased the downside risks to an already moderating global growth outlook”
Despite the global market disorder, according to the traders oil prices are expected to receive some support as supply cuts announced late last year by the Organization of the Petroleum Exporting Countries (OPEC) start to kick in. “Considering the planned cuts versus on going increases in U.S. crude production, which hit a record 11.7 million bpd by late 2018. It expected Brent prices to range between $55-$60 per barrel in the first months of 2019.”, reported the Facts Global Energy.
OPEC oil supply fell by 460,000 barrels per day (bpd) between November and December, to 32.68 million bpd. “If OPEC is ,firm on it’s agreed output cut together with non-OPEC partners, it would take 3-4 months to eliminate the excess inventories,” energy consultancy FGE said.