Oil continues to drop on Friday. West Texas Intermediate is down 6.59 percent and Brent 5.75 percent and both clocking in loses near or above 10 percent on a weekly basis. Investors were anticipating a bigger disruption from US sanctions against Iranian exports, but as waivers appeared and at the same time the Trump administration pressured the OPEC to keep prices low, oversupply fears have risen.
Bearish sentiment has driven crude prices lower with both WTI and Brent losing more than 20 percent this month. Trade concerns as the US-China trade dispute is heading for a showdown in Buenos Aires have hit global growth forecasts impacting energy demand expectations.
The leaders of the US and China will meet ahead of the overarching G20 meeting in Argentina. There have been some optimistic comments last week, but the latest official statements signal the two sides are still far apart.
The lack of a unified statement at the end of the APEC summit, attended by both the US and China, set a grim forecast for the G20 meeting.
The OPEC is expected to once again agree to limit production to add stability to falling oil prices. This time around the other major producers are not as onside as they were in the past with Russia not ready to commit until more data is available. WTI is slightly above the $50 price and will test it to the downside if trade and oversupply concerns continue.
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Alfonso Esparza