Oil under pressure from the risk of a slowdown in the global economy
On the eve of the main factor of pressure on oil prices, which dipped by 1%, was the aggravation of unrest among investors about the slowing global economy and, as a consequence, cooling of the global energy demand. Blame become dismal performance of the Chinese import and export advisee on all risky assets. Brent was forced to speed up the retreat, lost above $60, and in the violated the integrity of the $59, rebounding from whom has resumed a modest rise in early trading Tuesday.
Actually all these fears about slowing global GDP and impending recession are somewhat exaggerated and involve a chain reaction, spreading across markets. Speaking specifically about China and its demand for oil, while it is nothing to worry about in December crude imports in the country grew almost 30% yoy.
Yes, the echo of the trade war is already in full swing, certain destabilizing processes do occur, but investors overreacting to any negative signals, and prefer to get rid of risk at every opportunity, fearing that the worst is yet to come.
Such attitudes hinder the development of recovery of quotations of black gold from the lows near $50. But given the progress in trade negotiations, the US and China, dovish fed, weak dollar, high energy demand in winter and increased confidence among OPEC members about their ability to return the market to balance, Brent bearish potential at this stage seems limited, and the upside risks should prevail.
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