The Threat of Hurricane Dorian Looms
August 30, 2019
The energy market traded higher yesterday on the idea that China was taking a softer stance on the trade war, the potential threats from Hurricane Dorian, and the big decline in crude stocks reported this week in the DOE inventory update.
China’s commerce ministry said yesterday that they will not immediately respond to the latest round of US tariffs and wanted to resolve the dispute with a calm attitude.
President Trump said yesterday also that the US and China are set to have trade talks this coming Thursday at a different level. He went on to say he wanted to see the end product before judging any resolution.
China warned a US warship sailing near disputed island in the South China Sea that it was violating the country sovereignty. A spokesman for the Japan-based US Navy’s Seventh Fleet Commander Reann Mommsen, said the operation was conducted to challenge excessive maritime claims and preserve access to the waterways as governed by international law.
Hurricane Dorian may initially cause an increase in fuel demand and shortages in some area, especially for gasoline, when evacuations take place. However, after the hurricane hits it may cause power outages or flooding that could reduce fuel demand for gasoline vehicles and power generation units.
Due to the fact that today is the last trading day prior to the long holiday weekend it should lead to some volatility today as traders will not want to go home short.