Oil prices got hit hard as it is unclear that Russia wants to collude further with OPEC and U.S.-China trade talks stall over the same old issues. The U.S. lifting of tariffs on China and how many Ag products China will actually buy are center point again. Comments by Russia started the slide as it appeared that Russia was telling OPEC that they felt there is no need for additional oil production cuts. That may have come as a disappointment to Saudi Arabia that was already disappointed by the fact that foreign investors failed to embrace the Saudi Aramco IPO believing it too coerced by the Saudis leaving investors to carry the load.

Overnight Russian Emery Minister Alexander Novak says that Russia will organize a meeting with Russia oil companies ahead of the OPEC plus meeting in Vienna and is not ready to announce their stance on production levels. Russian oil companies have been pressuring the Russian government to increase output. They have been held back by Russian President Vladimir Putin and Mr. Novak says that Russia is trying to be in line with its OPEC plus commitments. Yet this seems to be the Russian dance that Russia always plays ahead of these meetings. They will play it up and suggest Russian oil companies want to raise output but then Vladimir Putin can ride in on a white horse and save the OPEC plus accord. Mr. Novak also suggests that demand is better than most people think and he expects it will grow by about 1.0 million barrels a day.

Of course, market moves can also be dictated by the U.S.-China trade talks. The back and forth is causing markets to sputter. President Trump says if they don’t make a deal, he would be fine with that and just raise tariffs further. China, for their part, may add more stimulus to their economy by introducing new measures to "reduce individual income tax burdens”. Maybe that will help the Chinese to buy U.S. pork as those prices are surging, causing widespread food inflation in the country.

Oil prices also saw weakness after the American Petroleum Institute reported that U.S. crude stocks rose by a whopping 6.0 million barrels despite a 1.4-million-barrel draw in Cushing, Oklahoma. There is some speculation that the API is trying to get more in line with the Energy Information Administration (EIA) report that is released later, at 9:30 central time today.

The way the ultra-low sulfur diesel contract fell yesterday, one might guess that it was diesel that was better supplied than gasoline. Yet the API reported the opposite. They showed a 2.2 million barrel drop in distillate and a surprise 3.4-million-barrel increase in gasoline supply. The reason why diesel may have underperformed was a change in the winter forecast from colder to warmer.

That warmer forecast hurt natural gas prices as well. Overseas there is more talk of an oversupply of LNG. Reuters reports that Singaporean gas importer and marketer Pavilion Energy has taken the unusual step of canceling the loading of a liquefied natural gas (LNG) cargo from the United States, but has agreed to pay for it, several industry sources told Reuters. The global LNG market is awash with new supply amid slowing demand in key countries such as China and Japan, leaving some traders with cargoes they have bought but are unable to resell. “Pavilion Energy evaluated scheduling and other commercial matters, then took the decision not to lift the cargo in full coordination with the supplier,” a spokeswoman for the company said.