Oil tanked to nearly $60 a barrel on Friday as concern about a slowdown in the world economy, and oil demand exceeded hints of progress in the U.S.-China trade conflict.
The Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) both issued reviews this week pointing to an oil glut next year, regardless of an OPEC-led agreement to cut supply that runs until March 2020.
Benchmark Brent was down 25 cents at $60.13 per barrel by 0830 GMT, while U.S. West Texas Intermediate was up 5 cents at $55.14.
Hopes of progress in the trade conflict granted support. The world’s two prominent economies are preparing for a new round of negotiations aimed at restricting the prolonged dispute and have been making placatory gestures, improving investor sentiment.
Brent has exchanged in a range of almost $5 this week and is heading for its first weekly loss in five weeks. The U.S. benchmark, similarly unstable, was on track for the first weekly slump in three weeks.
Brent is up 12% this year, helped by an agreement by OPEC and allies including Russia, an alliance called OPEC+, to cut production by 1.2 million barrels a day.
The producers are trying to block inventories from piling up and, in a sign, the plan is bearing fruit, U.S. crude oil stocks dropped last week to the lowest in almost a year.
An OPEC+ monitoring panel met this week and secured commitments from OPEC members Nigeria and Iraq to deliver their share of the cut, something they’ve failed to do so far; however, made no progress on possibly extending the supply cut.