Trade Talk Optimism Boosts Energy Prices
November 4th, 2019
The number of rigs drilling for oil fell by 5 putting the total oil crude oil rigs to 691 compared to 874 last year as reported by Baker Hughes. This is the lowest US oil rig count since 04-21-2017.
The market is trading higher to start the week as there is a lot of positive comments about China and US trade deal. White House adviser, Larry Kudlow, said President Trump and US negotiators are “very optimistic” on a trade deal with China. Xinhua News Agency reported that the US and China reached a consensus after talks between their mina trade negotiators on Friday. US Commerce Secretary, Wilbur Ross said the Federal Reserve rate cut will be good for the housing sector. He also stated that the initial “phase one” trade agreement with China appears to be in good shape and is likely to be signed around the mid-November, although a finite date is still in question. US Treasury Secretary, Steve Mnuchin, said the US and China are working hard to conclude a trade deal following directions from their leaders. He was speaking to reporters in New Delhi, where he held talks with Indian leaders as part of a regional tour.
Also helping to support the rally in process this morning are comments by Iranian Oil Minister Bijan Zanganeh saying that he expects further production cuts to be agreed upon at the next OPEC meeting in December.
The jobs number on Friday was better than expected and that optimism is also helping to push prices this morning. From Dow Jones, Nonfarm payrolls rose by 128,000 in October, exceeding the estimates of 75,000 from economists surveyed by Dow Jones. There were also the adjustments to the upside for both August and September numbers. August jobs were revised up from 168,000 to 219,000 and September’s jobs were revised up from 136,000 to 180,000.
The market is looking at all this as good news and positive for the economy and energy traders are buying that optimism.