The Oil fundamentals remains negative

Oil prices remain under pressure after official data showed U.S. crude and gasoline stocks rose and President Donald Trump signed into law a bill backing protesters in Hong Kong, fuelling tensions with China.

China warned the United States that it would take "firm countermeasures" in response to U.S. legislation backing anti-government protesters in Hong Kong.

Investors are concerned that the move might delay further a preliminary agreement between the United States and China to put an end to their trade war that has slowed global economic growth, and consequently consumption of oil.

The approval of the Hong Kong legislation backing protesters is likely to put the trade agreement into question as China has reiterated its threat of retaliation. If investors suspect that the trade agreement is under real danger, expect to see a sharp sell-off in December. For now, investors are taking a wait-and-see approach.

Investors have also been focused on next week's meeting of the Organization of the Petroleum Exporting Countries and allies including Russia, a group known as OPEC+, which have been withholding production to support prices.

The expectations are OPEC+ to roll over its current production-cut deal, which is set to expire at the end of March, by three to six months. The upshot is that deeper cuts by the entire membership are unlikely.

Russian oil companies proposed not to change their output quotas as part of the global deal until the end of March, putting pressure on OPEC+ to avoid any major policy change.

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