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Could Trump And Xi Kill Bearish Sentiment In Oil?

US - China

On November 30th two rather powerful men are set to have a meeting in Argentina and they may very well decide the short-term fate of global oil prices.

Markets have been holding their breath in the lead up to the Trump/Xi meeting at the upcoming G20 summit, and this week they seem to be running out of air. Crude oil tumbled and US stocks tanked as the two sides squabbled over current trade arrangements which ultimately ended up in a US-bound China trade delegation cancelling their trip. US Vice President Mike Pence reiterated that the US will not hesitate to double current tariff levels on roughly $250 billion worth of goods and Trump rejected a list of 142 concessions made by Chinese officials as inadequate. The US Trade Representative’s office also released a report on Tuesday concluding China has yet to begin altering the practices which the US views as unfair. Both sides seem to be downplaying the likelihood of reaching a deal prior to January 1 when the next round of US duties will increase to 25% on a wide array of Chinese consumer goods.

From our angle, it appears that Trump and Xi seem to be the only two people who could slow the radically bearish price action in oil. Brent crude has tumbled from $86.74 to $61.71 over the last six weeks as massive over production from Saudi Arabia has been exacerbated by increased confidence that the global economy is heading into a chilly 2019. Global markets are increasingly playing defense, as evidenced by this…

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