While the stock markets were mixed and mostly up, crude oil did not experience the same escalation on Tuesday. As the US-China trade war is about to enter a new saga, oil prices dropped.
With the markets being anxious, not much trade happens during Tuesday trading. As a result, WTI Crude lost 0.85% and Brent Crude was down 0.72%.
Apparently, the focus of the oil markets was on the upcoming trade war negotiations between the US and China in Washington DC. The outcomes of the negotiations are presumably affecting the global economy conditions as well as possible demands for crude oil.
Reflecting upon the current situation of the markets, the CEO of Aramco, Amin Nasser, opined that there are various factors affecting the market. However, the arguably biggest is the upcoming trade war negotiations.
“There are so many factors impacting the price. The market was very satisfied with the response from Saudi Aramco (regarding the drone attack). I think what’s impacting the price today is the global economic situation, the tariffs dispute that’s ongoing right now between the two global economies and so all of these things are impacting the price of crude,” he said.
Also Read: Oil Price Falls 2.2% Following Trump’s Comment on Trade War Optimism
Factors Affecting Today’s Crude Oil Price
As the oil price has been suffering in the latest minute, many factors are believably influential to the decline. These factors have caused oil prices to fall three consecutive days on Wednesday.
The first and foremost factor is the continuation of talks pertaining to US-China trade war as what Amin Nasser said before. Additionally, an oil market expert, Helima Croft, also indicated that this progression is currently more significant in shaping the oil prices rather than other factors.
Accordingly, myriad oil companies are worrying about the future demand. If the negotiations went wrong, even OPEC would not be able to do much.
“We still have huge fears about demand. That is what’s weighing on this market. The big turn in this market this year was the resumption of the trade war and as long as we have these trade war fears hanging over this market, OPEC can do what they can in terms of production cuts but the question is: Can you move this market higher?” said Helima Croft.
The second factor is still pertinent to US-China trade war. Reportedly, the fact that the US blacklisted Chinese firms again has contributed to the market’s anxiety.
The third one is the September’s drone attacks on Saudi oil infrastructure. Although the issue is no longer happening at the moment, the impact was making the market uncertain for a particular period.
Also Read: Oil Prices Surge Pushes Asia Markets Lower
