Low oil prices as the US-China trade war intensifies
2018-09-18 09:14 am | Resource: News | No Views : 53
Crude oil futures traded losses on Tuesday as investors expected a trade war between the world's biggest oil consumer and one of the biggest producers, the United States and China, to lead to a drop in demand for the commodity. Trade tensions between the two countries intensified after US President Donald Trump announced a new round of tariffs on Chinese imports worth $ 200 billion, to which Beijing responded countermeasures, due to come into force on September 24, the same day as US tariffs.
In the meantime, an Iranian oil official claimed that the country will continue to export oil despite US sanctions, stressing that it would be "impractical" to reduce the country's exports to zero because it is "impossible" to meet the high demand in the global market without Iranian crude.
Oil: Supply cuts fading in 2019
On the other hand, an analysis by Westminac research analyst Justin Smirk showed that crude oil performance outweighs expectations because of the disruption of oil production from Venezuela and Angola, as well as the US withdrawal from the Iranian nuclear deal.
By 2017/2018, global crude oil production fell below demand. However, had production difficulties not existed in Venezuela and Angola, OPEC's total output would have exceeded the agreed target output by around 25%. US production has risen while non-Opec production outside the United States is also rising.
"The market balance is shifting from deficit to surplus in late 2018 as stocks start to climb through 2019." "Westpac expects Brent to maintain current levels to the end of 2018 before retreating to 62 US dollars per barrel by the end of 2019. As oil prices are strengthened, demand expectations have been adjusted downwards," the report said.
"The International Energy Agency estimates that if the average price is 9 percent above US $ 70 a barrel in 2018, there is a potential for further demand reduction of 270,000 bpd."
Time frame Used - four hours Oil is moving in a bearish direction in the near term The bears managed to press the oil to retreat below level of 70.46, forming a positive candlestick pattern but it still facing resistance around level of 72.71 In view of the technical indicators Both the RSI and the Stochastic are indicating signs of recovery Accordingly, we expect that the oil will break…
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