3-4 minutes - Source: CNBC
Oil was pressured further after the European Central Bank cut its deposit rate to a record low -0.5% from -0.4% and said it will restart bond purchases of 20 billion euros a month from November to prop up euro zone growth.
Brent crude futures were down 74 cents, or 1.2%, at $60.07 a barrel by 1:54 p.m. EDT (1754 GMT). U.S. West Texas Intermediate crude futures fell 92 cents, or 1.7%, to $54.83 a barrel. Both were heading for a third session of losses.
Both Brent and WTI fell below the $60 and $55 a barrel marks during the session, triggering auto-selling.
Oil futures extended their losses after a senior White House official denied a Bloomberg News report that the United States was considering a temporary trade agreement with China, according to CNBC.
The prospect that the world’s two largest economies made some concessions in a protracted trade war, according to a previous report, supported prices earlier in the session.
“All of a sudden we had a ray of hope,” said Phil Flynn, an analyst at Price Futures Group in Chicago.
“Now that they’re downplaying that and, immediately, the stocks went back down, gold came back up and oil went back down.”
Also hitting oil prices were comments by Saudi Arabia’s new energy minister, Prince Abdulaziz bin Salman, who said deeper cuts would not be decided upon before a meeting of the Organization of the Petroleum Exporting Countries planned for December.
The meeting yielded a promise to keep countries within the production quotas they committed to in a global supply deal, which would limit oil coming to the market as Nigeria, Iraq and Russia have, at times, produced more than their allocations.
A statement from OPEC and its allies, a grouping known as OPEC+, said oil stocks in industrial countries remained above the five-year average. Oman’s energy minister said “the outlook is not very good for 2020.”
Prince Abdulaziz said Saudi Arabia would keep cutting by more than it pledged in the pact that has throttled supply from OPEC+ by 1.2 million barrels per day.
Also feeding the bearish sentiment, the International Energy Agency said surging U.S. output would make balancing the market “daunting” in 2020.
“Booming shale production has allowed the U.S. to close in on, and briefly overtake, Saudi Arabia as the world’s top oil exporter ... in June, after crude exports surged above 3 million bpd,” said the agency that advises industrial economies on energy policy in its monthly report.
The Paris-based IEA kept its oil demand growth forecasts for this and next year at 1.1 million bpd and 1.3 million bpd, respectively.