Oil Price - June 27
Posted: Thu Jun 27, 2019 8:24 am
WTI dipped to $58.69/bbl at 6:51AM ET but it has bounce back to $59.26/bbl at the time of this post (9:18 AM ET). WTI got within a few cents of $60 yesterday after EIA announced the largest weekly decline in U.S. crude oil inventories in three years. Now we must wait for the meeting between President Trump and President Xi Pinging that is expected to occur on Saturday. After that we should get news from OPEC+ on July 3. For now, unless Iran does something stupid, WTI is stuck in the $58 to $60 range. - Dan
Below is cut from https://www.investing.com/analysis/char ... -200435125
Oil traders are sitting on the sidelines, waiting to be smarter about the prospects of demand for oil after the Trump-Xi meeting during the G20 summit Saturday in Osaka, Japan. If things go south, so will demand for oil, followed immediately by prices.
If President Donald Trump follows through with his threat to levy duties on all remaining Chinese goods worth $ 300 billion, China will be incentivized to devalue the yuan to compensate for the tariffs and loss of business with the U.S. due to the blacklisting of Chinese companies, which Trump intimated yesterday. The devalued yuan would render dollar-denominated oil more expensive, hitting demand.
OPEC has been delaying a production management meeting till after the U.S.-China meeting for the same reason, to manage the price accordingly to maintain market share. To clarify, it will be in OPEC’s interest to keep a lid on prices.
The fear of falling demand is so powerful that it's overshadowed the lowest U.S. inventory release in 3 years. This has led to something rarely seen: the same market themes driving opposing reactions within different markets. Equity traders see hope in the reported tentative tariff ceasefire, while oil players need further proof that the U.S.-Sino relationship is improving.
Below is cut from https://www.investing.com/analysis/char ... -200435125
Oil traders are sitting on the sidelines, waiting to be smarter about the prospects of demand for oil after the Trump-Xi meeting during the G20 summit Saturday in Osaka, Japan. If things go south, so will demand for oil, followed immediately by prices.
If President Donald Trump follows through with his threat to levy duties on all remaining Chinese goods worth $ 300 billion, China will be incentivized to devalue the yuan to compensate for the tariffs and loss of business with the U.S. due to the blacklisting of Chinese companies, which Trump intimated yesterday. The devalued yuan would render dollar-denominated oil more expensive, hitting demand.
OPEC has been delaying a production management meeting till after the U.S.-China meeting for the same reason, to manage the price accordingly to maintain market share. To clarify, it will be in OPEC’s interest to keep a lid on prices.
The fear of falling demand is so powerful that it's overshadowed the lowest U.S. inventory release in 3 years. This has led to something rarely seen: the same market themes driving opposing reactions within different markets. Equity traders see hope in the reported tentative tariff ceasefire, while oil players need further proof that the U.S.-Sino relationship is improving.