The Energy Market is Selling Off
September 3, 2019
The energy market is selling off as the bulls are unable to sustain their rally and break the market out on the upside. The fact that the US and China have imposed more tariffs on each other’s goods is not a positive for the global economy and traders are taking their profits this morning in a holiday shortened trading week. China and the US are also having a hard time deciding on a date to continue the trade negotiations and that also make this market uneasy.
The market is also worried that Hurricane Dorian will also impact energy demand negatively. It has already impact well over 1, 000 airline flights.
The Baker Hughes rig count showed that in the US the number of rigs looking for crude oil were cut by 12 rigs bringing the total number to 742 compared with 862 last year at this time. This is the lowest US oil rig count since January 5th, 2018.
Also helping the market sell off was the report that OPEC oil production was up 80,000 bpd in August.
Sources stated that the board of Saudi Aramco has determined that listing the state energy company in New York would carry too many legal risks to make it a realistic option, although they said a final decision would be made of Saudi Arabia’s Crowne Price, Mohammed bin Salman.
The UN’s IAEA stated that Iran has gone further in breaching its nuclear deal with world powers, increasing its stock of enriched uranium while still refining to a greater purity than allowed.
US Consumer confidence fell in August to the lowest level since October 2016, with sharp decline in both current conditions and expectations components.
Britain’s pound t has fallen to its lowest level against the dollar since January 2017 and before that February 1985, as concerns about political stability and a disruptive Brexit intensify.