Oil could remain resilient against trade jitters

Oil prices saw small moves today as markets await a key update with the US-China trade war.  The pessimistic outlook for global growth should be temporary as both sides remain motivated to push through a deal.  The short-term risks for oil remain to the upside as output at risk remains high due to the sanctions on Venezuelan and Iranian oil, along with disruptions with Libyan crude.

Many analysts see oil markets becoming balanced this year, followed by a deficit in 2020.  Tight supplies should keep oil supported, but growing production from Cushing will likely cap any West Texas Intermediate crude gains above the $70 a barrel level.

In the short-term crude could stabilize further here on tightness with the overall global crude balance and optimism that demand side of the argument will get a boost from eventual trade deal from the Chinese and US.

 

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Ed Moya

Ed Moya

Senior Market Analyst at OANDA
With more than 20 years’ trading experience, Ed Moya is a market analyst with OANDA, producing up-to-the-minute fundamental analysis of geo-political events and monetary policies in the US, Europe, the Middle East and North Africa. Over the course of his career, he has worked with some of the world’s leading forex brokerages and research departments including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including BNN, CNBC, Fox Business, and Bloomberg. He is often quoted in leading print and online publications such as the Wall Street Journal and the Washington Post. He holds a BA in Economics from Rutgers University. Follow Ed on Twitter @edjmoya ‏
Ed Moya