Crude prices are going nuclear as President Donald Trump pulled out of the Iranian nuclear accord creating a new risk dynamic for global oil markets. The decision by president Trump to pull the plug on what he said was a horrible deal comes as global oil demand is rising and the lack of investment in the oil patch is making it difficult for global oil production to keep pace with demand.
President Trump has said the Iran Nuclear deal was insane and ridiculous, yet that does not necessarily mean that he is going to back out of it. That possibility helped break oil from near a three-and-a-half-year high that had rallied, in part, on threats by Iranian President Hassan Rouhani, who warned of "severe consequences" if the Trump Administration "betrays the deal."
Making collusion great again. The OPEC says that its recent move to cut oil production had nothing to do with greed, but they acted with a “noble goal” of rescuing the global oil market. These comments came from the UAE energy minister Suhail Al Mazrouei, who said it’s not about raising prices it is about the noble endeavor of working to reduce oversupply. Well, in a way he does have a point.
Recently, the Trump Administration introduced trade barriers on the imports of washing machines and solar products. This move was based on a World Trade Organization rule that allows countries to re-introduce trade barriers in cases where evidence clearly suggests that “a domestic industry is injured or threatened with injury caused by a surge in imports.”
The U.S.-led strikes against Syria turned out to be a non-event as far the markets are concerned and fortunately there were no reports of casualties. Only three targets were hit and the wave of strike action has already been declared to be over -– at least for the time being, anyway. However, investors still remain wary of the potential for tensions to escalate between Russia and the West.
Mission accomplished. No, I'm not talking about the trade war, but we could be seeing progress on that, and not the attack on Syria, that has not happened, yet. No, we are talking about the global oil market rebalancing. The International Energy Agency that previously warned of lower for longer oil prices and warned last year that the oil price recovery was threatened by the possibility of weak demand now has changed its tune and is now saying that it is 'mission accomplished' for OPEC as oil stocks shrink at a record pace.
The markets started Thursday’s session once again very quietly with the major currency pairs moving very little throughout Asian and the first half of the European session before another tweet from President Donald Trump caused volatility to spike. After stoking fears yesterday that an attack on Syria was imminent, today he appeared to backtrack slightly.
U.S. stocks tumbled Monday as President Donald Trump continued his criticism of Amazon, sending those in the technology and consumer discretionary sectors lower. The selling also comes ahead of the Trump administration's plan to unveil this week the list of Chinese imports targeted for US tariffs. The list of $50 billion to $60 billion worth of annual imports is expected to target "largely high-technology" products.