(Bloomberg) -- Oil surrendered gains amid conflicting signals about the direction on U.S. and Chinese efforts to mend their fraying trade relationship.
Futures declined as much 1% in New York on Monday after earlier rising 0.5%. In a bid to address a key sticking point in the protracted trade dispute, China pledged to tighten intellectual property rules. The ongoing impasse between the world’s two largest economies has imperiled demand for petroleum-based fuels.
“The market is still highly driven by U.S.-China trade and any tap in negotiations and headlines would be very significant in terms of driving market sentiment and pushing things,” said Kyle Cooper, research director of IAF Advisors in Houston.
Crude has rebounded since early October on signs of progress toward a trade deal but a flood of supply from American shale fields and other sources have limited gains. Oil investors are growing restless as the negotiations drag on, with money managers cutting their net bets on a West Texas Intermediate rally by 13% in the week ended Nov. 19.
WTI for January delivery fell 25 cents to $57.52 a barrel at 10:13 a.m. on the New York Mercantile Exchange.
Brent for January settlement fell 11 cents to $63.28 on the London-based ICE (NYSE:ICE) Futures Europe Exchange, after dropping 0.9% on Friday. The global benchmark traded at a $5.76 premium to WTI.
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China’s concession on intellectual property comes as trade negotiators have been trying to bridge the remaining differences including Beijing’s pledges to buy American grain and meat, and open China’s economy more to foreign companies.
