U.S. West Texas Intermediate crude oil is edging lower at the end of the week with prices being dragged down by weak U.S. fuel demand, fears of a second wave of coronavirus cases in South Korea and a worsening in U.S.-China relations. Nonetheless, the markets remain on track for a hefty monthly gain.
The WTI contract is also in a position to post its first weekly loss after four consecutive weeks of gains that leaves it set for its biggest monthly gain in years thanks to production cuts and optimism over Chinese-led demand recovery, analysts said.
July WTI is on track for a record monthly gain of 54% in May that would represent its strongest monthly rise since March 1999, Reuters said.
There are headwinds, however, which are likely the reason behind this week’s abrupt halt of the current rally. These headwinds include possible U.S. sanctions against China over its treatment of Hong Kong, Russia’s lack of participation in an extension of the OPEC+ production cuts, and weak U.S. demand.
Trump to Announce US Response to China’s Treatment of Hong Kong
U.S. President Donald Trump is expected to hold a news conference on China later on Friday as his administration moves to pressure Beijing over its treatment of Hong Kong.
Traders will be looking for guidance to see whether Trump’s announcement triggers further escalation between the two largest economies. After Trump’s speech, traders will be looking to react to China’s…