• 4 minutes China's Economy and Subsequent Energy Demand To Decelerate Sharply Through 2024
  • 7 minutes Beijing Must Face Reality That Taiwan is Independent
  • 11 minutes Phase One trade deal, for China it is all about technology war
  • 14 minutes Shale Oil Fiasco
  • 17 mins We're freezing! Isn't it great? The carbon tax must be working!
  • 9 mins Trump has changed into a World Leader
  • 2 hours Which emissions are worse?: Cows vs. Keystone Pipeline
  • 1 hour Boris Johnson taken decision about 5G Huawei ban by delay (fait accompli method)
  • 12 hours What's the Endgame Here?
  • 7 hours Indonesia Stands Up to China. Will Japan Help?
  • 3 hours Might be Time for NG Producers to Find New Career
  • 12 hours Turkey Muscles-In on Israel-Greece-Cyprus EastMed Gas Pipeline Deal. Erdogan Still Dreaming of Ottoman Empire II.
  • 6 hours Prototype Haliade X 12MW turbine starts operating in Rotterdam
  • 19 hours Trump capitulated
  • 19 hours US Shale: Technology
  • 20 hours Gravity is a scam!

Trade Wars: It’s Time To Dial It Down A Bit

Trade War

Remember when oil markets used to be driven by oil headlines? What quaint times. We used to write about things like Middle East supply outages, OPEC deals and crude backlogs in Cushing. We’d discuss the financial health of frackers, daily supply/demand balances, refinery maintenance season and monthly Chinese imports. It was all very last season. 2017 stuff. And in August of 2019 where trade disputes and inverted yield curves rule, it somehow feels passé.

Brent crude oil has tumbled about 20% since April and it’s hard not to credit the deterioration of US/China relations for much of the slide. While it’s true that daily supply/demand balances have turned bearish in the last few months, it’s difficult to imagine oil prices taking this sort of tumble in the absence of a negative macro backdrop. Crude production in Libya has dropped sharply this summer while Venezuela is producing just 760k bpd and Iranian exports have been strangled basically to 0 bpd. There are certainly some bullish spots in the crude market which physical traders have dealt with by keeping prompt Brent and US gasoline structure comfortably backwardated. This week the front 1-month Brent spread traded near +50 cents while the prompt 1-month US gasoline spread was near +11 cents, so perhaps it’s not all that bad out there. Nevertheless, these tight spots in the physical markets are being overwhelmed by macro and if you happen to be bullish on oil you certainly didn’t…




Oilprice - The No. 1 Source for Oil & Energy News