U.S. West Texas Intermediate crude oil futures are in a position to finish flat for the week. The price action was driven this week by two-sided news about the progress of U.S.-China trade relations, and renewed worries over demand, driven by reports from OPEC and the Energy Information Agency. This week’s government inventories report was also bearish, however, the focus didn’t seem to be about supply this week, but rather future demand growth due to the impact of the on-going trade war on the global economy.
US-China Trade News Fuels Two-Sided Response
This week has been filled with a few headlines regarding trade issues but nothing hard-hitting enough to think a partial-trade deal was imminent. Crude oil prices responded to two-sided headlines by trading accordingly – bearish news pressured prices, bullish news supported prices.
The week started with worries that President Donald Trump had not agreed to the rollback in tariffs that a China announced on November 7. Last Friday, Trump said, “China would like to get somewhat of a rollback, not a complete rollback, ‘cause they know I won’t do it. I haven’t agreed to anything.”
Then on November 12, President Trump said the United States will increase tariffs on Chinese goods if the first step of a broader trade agreement isn’t reached.
“If we don’t make a deal, we’re going to substantially raise those tariffs,” he said…