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Oil Fundamentals Remain Bearish Despite Bullish Headlines

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Oil prices got a variety of bullish headlines early this week as US/Iran tensions continued to boil, there was a modest thaw in US/China trade relations and the ECB president told reports he’s ready to cut rates if necessary. OPEC+ also made headlines by making steps towards cementing a supply cut extension in July.

On the Iran front, this weekend’s attacks on oil tankers in the Gulf of Oman are understood by US intelligence to have come at the hand of Iran-linked personnel. Secretary of State Mike Pompeo and National Security Advisor John Bolton have both publicly made hawkish comments towards Iran and the Iranians, in turn, have stated they will begin to enrich uranium at higher levels than what the JCPOA would have allowed. President Trump, meanwhile, has hinted that he will not hesitate to send additional troops to the Middle East to neutralize further Iranian aggression while also noting that he, in no way, wants to seek war with Iran (and batted down John Bolton in doing so.) He also described the oil tanker attacks as ‘very minor.’ While a path to a major US/Iran conflict still appears murky, it does seem that both sides seem to be locked in a destructive cycle of antagonization then reaction which makes a path to a cease in hostilities equally murky. For now, it’s hard to say much more than that this is a critical oil market situation which we need to continue to monitor.

As for US/China, Donald Trump sent stock markets soaring…




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