Singapore — Crude oil futures were lower in mid-morning trade in Asia Friday as investors were cautious on how the agreement made between the US and China to roll back their respective tariffs will pan out.
At 11:28 am Singapore time (0328 GMT), ICE January Brent crude futures was lower by 12 cents/b (0.19%) from Thursday's settle at $62.17/b, while the NYMEX December light sweet crude contract fell by 24 cents/b (0.42%) at $56.91/b.
China and the US would roll tariffs back on one another's goods incrementally as the two sides continue to negotiate towards a trade deal, China's Commerce Ministry said Thursday.
"Nevertheless, the devil is always in details. Investors may remain cautious until they see details," OCBC Bank analysts said in their report on Friday.
"The rollback of existing tariffs is a positive surprise. However, given President Trump's love of tariffs, the additional element may risk prolonging the phase one negotiation," they wrote.
Meanwhile, reports this week that OPEC+ members may not implement deeper output cuts on the back of brighter-than-expected oil market conditions in 2020 were also weighing on sentiment, analysts said.
"Bullish sentiment was tempered by reports that OPEC+ producers are not looking for deeper production cuts. According to delegates across the group, they will be pushing for better adherence to the current production cut agreement," ANZ analyst wrote in a report Friday.
"There was also lingering concerns about a rise in inventories in the US last week, with stockpiles climbing 7.93 million barrels," they added.
Elsewhere, the US oil and gas rig count dropped 10 to 876 on the week Thursday, according to consultants Enverus, as a heavy schedule of third-quarter earnings foreshadowed a likelihood of diminishing activity ahead.
Most of the rigs that left US fields in the past week were oil-directed, leaving a total of 710, while three gas rigs also were pulled out leaving 163. A two-rig decrease came from fields classified as neither oil nor gas.
Operators have let go over 350 oil and gas rigs since the 1,233-rig peak during this same week in November 2018.
The rig count is now at the same level as the first week of March 2017, when rigs were being added to fields across the oil patch as industry reveled in what was then oil price stability.
As of 0328 GMT, the US dollar index was lower by 0.02% at 97.956.
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