NEW YORK (Reuters) - Oil prices dipped on Tuesday, weighed down by uncertainty over the U.S.-China trade war and signs of increased global crude production, but losses were limited by expectations that crude exporters would agree to cut output at an upcoming OPEC meeting.
Prices fell to their lowest since October 2017 last week - Brent at $58.41 and WTI at $50.15.
Both crude benchmarks are down more than 30 percent since early October, depressed by an emerging supply overhang and widespread financial market weakness.
Market participants looked ahead to a meeting of leaders of the Group of 20 nations (G20), the world’s biggest economies, on Nov. 30 and Dec. 1, with the trade war between Washington and Beijing top of the agenda.
U.S. President Donald Trump is open to a trade deal with China but is prepared to hike tariffs on Chinese imports if there is no breakthrough on longstanding trade irritants during a Saturday night dinner with Chinese leader Xi Jinping, White House economic adviser Larry Kudlow said on Tuesday.
The White House sees the dinner as an opportunity to “turn the page” on a trade war with China. But he said the White House has been disappointed so far in the Chinese response to trade issues.
“The current tariffs have already hurt the global economy and the looming escalation only dampens the petroleum demand outlook further,” said John Kilduff, a partner at Again Capital Management in New York.
The top three crude producers, Russia, the United States and Saudi Arabia, will be at the G20 Summit, raising expectations that oil policy will be discussed.
The Organization of the Petroleum Exporting Countries will meet on Dec. 6 in Vienna to discuss output policy with some non-OPEC producers, including Russia.
Saudi Arabia raised oil production to a record high in November, an industry source said on Monday, pumping 11.1 million to 11.3 million barrels per day (bpd).
But the kingdom has been pushing for a collective production cut and is discussing a proposal to curb output by OPEC and its allies by as much as 1.4 million bpd, sources close to the discussions told Reuters this month.
Trump has pressured Saudi Arabia, OPEC’s de-facto leader, not to cut production.
U.S. crude production C-OUT-T-EIA also hit a record high this month of 11.7 million bpd, with stockpiles rising for nine straight weeks.
U.S. crude inventories rose by 3.5 million barrels last week to 442.7 million, industry group the American Petroleum Institute said late Tuesday, more than analysts’ forecasts for an increase of 769,000 barrels.
If government data on Wednesday confirms that crude stockpiles increased, it would be the tenth consecutive build.
Reporting by Stephanie Kelly in New York, Chistopher Johnson in London, Henning Gloystein in Singapore; Editing by Marguerita Choy and Phil Berlowitz
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