U.S. West Texas Intermediate crude oil futures are trading lower on Friday after hitting their highest level since December 7 earlier in the session. Profit-taking is likely behind the weakness. However, there are still lingering concerns over rising U.S. production, and key issues with China that have to be resolved despite favorable trade talks earlier in the week. Underpinning the market are the OPEC-led production cuts.
The bearish traders are saying that profit-taking and short-covering have been driving prices higher rather than aggressive counter-trend buyers.
They are also expressing concerns over the health of the global economy especially in China where growth in 2018 and 2019 is expected to be the lowest since 1990. This could pressure demand.
Furthermore, most analysts have downgraded their global economic growth forecasts below 3 percent for 2019. This will also be bad for demand.
Finally, the biggest concerns for bullish traders should be increasing U.S. production, which is expected to climb above 12 million bpd this month, the possibility OPEC and its allies will lose their discipline and US-China trade relations.
Throughout the week, optimism over the outcome of the U.S.-China…