Crude oil futures were weaker during mid-morning trade in Asia Friday amid ongoing trade concerns between the US and China, while a forecast for a slowdown in economic growth in Europe also pressured prices lower. At 9:50 am Singapore time (0150 GMT), ICE April Brent crude futures were down 23 cents/b (0.37%) from Thursday’s settle to $61.40/b, while the NYMEX March light sweet crude contract fell 31 cents/b (0.59%) at $52.33/b.

According to media reports, Larry Kudlow, the director of the White House National Economic Council, on Thursday suggested that the US and China were not close to reaching a trade deal before next month’s deadline for the ongoing 90-day truce between the two countries.  “Crude oil prices fell sharply after reports that the trade talks between the US and China had hit a stumbling block,” ANZ analysts said in a note Friday.  “White House advisor Kudlow warned that there is a sizeable distance between the two trading partners,” they added.

“In this twist and turn of the US-China trade issue, the meeting next week between high-ranking officials may still bring surprises. However, until then, the current tone is expected to be outrightly poor awaiting something better to come along,” Pan Jingyi, a market strategist at IG, said.  Meanwhile, the forecast for lower-than-expected economic growth in Europe has increased concerns of a global slowdown that could blunt oil demand growth. Thursday morning, the Bank of England cut its 2019 UK GDP growth forecast to 1.2% from 1.7%, citing Brexit uncertainty and a weaker global economic picture.

Bank of England Governor Mark Carney warned that the UK faced a 25% chance of recession in 2019, and that the risk of a recession would be increased by a no-deal Brexit.  Elsewhere, the Trump administration is confident key ally Saudi Arabia will fill any oil supply gap caused by US sanctions on Venezuela, with refineries along the Gulf Coast told not to expect any crude release from the Strategic Petroleum Reserve.