Oil Lower After Libyan Supply News and US-China Trade Comments

West Texas Intermediate fell 2.48 percent on Thursday as US President Donald Trump confirmed he would not meet the Chinese President before the tariff deadline. Despite some positive comments in the last two weeks about the state of the talks, the chances of a positive outcome were dealt a heavy blow by the fact there would be no high-level meetings. The deadline to reach a deal is March 1 and as per the White House’s economic adviser the US and China still have a pretty sizeable distance to go.

West Texas Intermediate graph

Venezuelan supply disruptions had prevented prices from falling earlier in the month, but as international pressure mounts on the Maduro government appears to be short lived.

Weekly crude stocks in the US were mixed keeping crude above $53 but as concerns rise on a lack of an agreement between the US and China would signal further global growth downgrades.

Brent crude graph

The OPEC agreement with major producers to cut output remains the biggest factor in keeping crude from falling further, but it remains to be seen how it for long it will last. Libyan production is expected to rise after the army took control of Sharara the largest oil field in the nation. Libya is exempt from production cuts given the armed unrest that was disrupting their energy operations.

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza