Oil Corrected Amid OPEC Meeting, Another US-China Trade Spat


While the OPEP Group is holding a important meeting on Monday and Tuesday to decide its output levels for the coming months, oil has been the target of profit-taking. For the January Nymex contract, the price of U.S. light crude (WTI) fell -0.4 percent to $45.34 a barrel, while the Brent contract for delivery in January fell -0.8 percent to $47.59. WTI’s share price, however, jumped more than 26 percent in November and Brent picked up 27 percent, and both climbed to the highest since March.

The members of OPEC are divided on whether to extend their production cuts past 31 December, according to the sources cited by Bloomberg. Last-minute negotiations between several members of the OPEC would not have contributed to any agreement to sustain the existing supply of oil.

On Monday, Gold began its black streak, suffering from the return of the stock markets’ risk appetite. The yellow metal ounce for the February Comex futures agreement lost another -0.4 percent to $1,775.70, after slipping 4.5 percent last week.

The yield on the 10-year T-Bond remained steady at 0.8440 percent in the U.S. government bond market. The dollar index, which tests its evolution against a basket of six currencies (the euro, the pound sterling, the yen, the Swiss franc, the Canadian dollar and the Swedish krona), gained 0.2% to 91.87 points, while the euro gave up -0.2% to 1,1971 dollars.

At the time when investors in the U.S. are looking for economy-boosting catalysts, the new reports about the trade war between the United States and China have not been appreciated by trhem. The Trump administration plans to blacklist the biggest chip producer in China, SMIC, as well as the oil giant CNOOC, according to Reuters.

The U.S. will add these groups to the blacklist of companies owned or connected to the Chinese military by the Department of Defense. 31 other entities are also included in this “black list.”

If confirmed, the move would restrict access to U.S. investors and is expected to fuel tensions with China only weeks prior to the inauguration of President-elect Joe Biden.

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