Oil pauses risk-rally on weak China imports, US elections in focus

Oil prices on both sides of the Atlantic brought an end to its recovery-mode staged yesterday, and turned negative in the Asian session on the back of pre-US election jitters and worse-than expected Chinese trade data.

Oil: Supply reports, US election in focus

Currently, both crude benchmarks trade modestly flat, with Brent flirting with $ 46 while WTI remains capped by $ 45 mark. Oil prices failed to extend the recovery mode this Tuesday, as below estimates Chinese Oct trade report, particularly a steep drop in the Chinese oil imports, weighed negatively on the sentiment around oil markets. China crude oil imports dropped to the lowest levels since January. China is the world’s second largest oil consumer.

Moreover, the black gold took a breather from yesterday’s risk-on rally as markets resort to profit-taking ahead of the US elections, which is likely to trigger extensive USD moves and eventually impact the USD denominated oil.

Oil prices rebounded sharply on Monday after OPEC’s secretary general Barkindo reiterated his commitment to reach an output cut deal at the Vienna meeting later this month. While he also added that Russia is willing to join in any output cut deal.

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