In this briefing:
1. Weekly Oil Views: US-China Trade Deal Suspense Puts Oil Market in Limbo
A high-level US delegation will be in Beijing for trade talks in the week of February 11, but Donald Trump rattled the markets on February 7 by saying that he would not be meeting his Chinese counterpart Xi Jinping before the March 1 deadline for the two countries to forge a deal or possibly end up escalating their battle.
That forced the financial markets to recalibrate their optimism with regard to the two countries putting all their conflicts behind them soon. Oil swooned along with global equities.
Trump had tweeted at the end of January that a “final deal” would not be made until he and Xi met and thrashed out some of the “long-standing” and “more difficult” issues the US has with Chinese trade practices.
With a comprehensive US-China trade deal in the next few weeks ruled out, and a ratcheting up of US tariffs from March 2 equally inconceivable, we discuss the likely middle-ground scenarios and what they mean for crude price direction.
Overall, though, the oil market could remain in limbo for a while. There are a number of supply risks gathering on the horizon, but those will likely not move center-stage until the economic worries that have gripped investors since the fourth quarter of last year are laid to rest.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
