Trump’s Tweets Are Changing Market Behavior
August 27, 2019
The energy markets were trading higher to start out the day on Monday as two news items helped to support the move higher. One was the idea that China and the US were ready to get back to the table and begin negotiations. The market saw this as a positive for the world’s two largest economies and traders bought the market. The other item supporting the market higher was the Baker Hughes rig count out on Friday that say crude oi rigs were down 16. Energy prices then began to sell off in midafternoon as new hit that French President Macron said that preparations were under way for a meeting between President Trump and Iran’s President Hassan. Traders feared that progress gets made on this front and an abundance of Iranian oil is now available and makes its way to the market and bearish outcome so traders took some profits and prices eased off into the close of the day.
Oil and gas explore Woodside Petroleum said it started producing oil from the $1.9 billion Greater Enfield project off Western Australia on Sunday. Production from the Greater Enfield reservoirs would make an important contribution to Woodside’s targeted annual production of about 100 million barrels of oil equivalents in 2020.
Bloomberg had the following statement that linked to two of their stories and good or bad it is a pretty accurate statement of the current market. Their statement: The president’s tweets are changing the rules of the markets. For investment professions, there’s little choice but to follow along.
I have not seen any early estimates about this week’s inventory report but Genscape is saying that Cushing crude stocks were down another 2 million barrels this reporting weeks. I have seen a few commentary’s that are expecting inventory levels to be down again this week as the number of rigs looking for oil declines and the average production out of shale wells also continues to decline.
The market has many issues to impact it and the news headlines and tweets will continue to move it on an intraday basis and volatility will continue to be high until some type of breakthrough or resolve come to some of these issues surrounding the market.