The rate of oil fell to $58.50 under the onslaught of trade wars

  • And
  • +A

Brent crude cheaper for the fourth consecutive week, the recently accelerating decline in a sudden escalation of Sino-us trade war. Last week lost about 9%, and now, violating the integrity of the level of 60 dollars per barrel, updating the lows of the beginning of the year in the area between 58.50 dollars.
The main factor of pressure on the futures trading is now a conflict between two largest economies. Moreover, market concerns about the decline in global demand due to the slowdown in the global economy are so high that traders ignored the positive industry signals, while continuing to reduce risks in the raw materials segment in case of a new collapse of the world’s playgrounds.
Meanwhile, the US continues to receive favorable statistics. So, the API reported another decline in stocks last week by 3.4 million barrels against forecasts for a drop of 2.8 million Also fell stocks of most oil products. Moreover, the US Department of energy slightly cut the Outlook for shale production in 2019. However, the picture here offered a contrast to the government’s statement that production growth in the Permian basin and other shale deposits compensates for the recent disruptions in supplies from the us Gulf coast due to hurricane Barry.
The situation on the world stock markets stabilized somewhat after the “bloodshed” in the beginning of the week, but not enough to give Brent some confidence. While the energy market is dominated by fears related to a trade war, China will continue to attract sellers on the growth attempts. From a technical point of view, the market situation deteriorated after passing the important milestone of 60 dollars per barrel, which now performs the function of the nearest significant resistance.
_____________________
Gennady Nikolaev
Expert
Academy of management Finance and investment