Singapore — Crude oil futures were marginally lower during mid-morning trade in Asia Monday, moving within a tight range as optimism from the US-China trade deal faded. Market participants were now looking for more clarity on the details of the trade deal.
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At 10:15 am Singapore time (0215 GMT), ICE February Brent crude futures fell 21 cents/b (0.32%) from Friday's settle to $65.01/b, while the front-month NYMEX January light sweet crude contract moved 19 cents/b (0.32%) lower to $59.88/b.
The US and China on Friday agreed to a trade deal under which the US will no longer impose additional tariffs on Chinese goods starting December 15.
"We have agreed to a very large Phase One Deal with China," US President Donald Trump said on Twitter. "The Penalty Tariffs set for December 15th will not be charged because of the fact that we made the deal. We will begin negotiations on the Phase Two Deal immediately, rather than waiting until after the 2020 election."
However, a 25% tariff will remain in place on $250 billion worth of Chinese goods, while 7.5% tariffs are in place for another $120 billion of goods, according to media reports.
"The upside for prices was capped after US President Donald Trump said that the 25% levy on $250 billion of goods would remain," said ANZ analysts in a note.
"Yes, we have a deal, but trade negotiations will continue; for now, escalation seems to be off the table. However, the path to the comprehensive agreement is still miles away," said Stephen Innes, chief Asia market strategist at AxiTrader, in a note Monday.
Risks remain as the US and China are not expected to sign phase one of the deal until January, and the threat of tariffs remain in place during the negotiations of phase two, analysts noted.
According to media reports, US trade representative Robert Lighthizer on Sunday said that the trade deal between the two economies was "totally done" although he added that a date and a location for senior US and Chinese officials to meet and formally sign the document was still not decided.
Elsewhere, Baker Hughes on Friday reported that the number of active US oil rigs rose by four to 667 for the week ended December 13.
As of 0215 GMT, the US Dollar Index was down 0.1% at 96.65.
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