Trade War Concerns Weigh on Market
August 6th, 2019
The trade war concerns really weighed on the markets yesterday as equities were off hard and energy prices as well. The concerns for a slowdown in the global economy impacted most markets yesterday. The energy market has not been able to take out key support just yet so the bulls are still alive. Another day of strong selling and it will start to look more bearish but if we see a rebound then maybe the market at a minimum is at least in for some sideways trading.
Analysts at Bank of America said that the latest round of US tariffs on China could reduce world crude oil demand by 225,000 – 500,000 bpd. Bank of America did leave their $60 Brent crude oil forecast in place for 2020 but said that if China reinitiates buying crude oil from Iran, this could send oil prices into a tailspin with crude back down to 2016 levels ($30 per barrel).
Iran’s Atomic Energy Organization told European signatories to the 2015 nuclear deal it would further reduce its compliance in about a month’s time if they failed to uphold their commitments.
Iran’s Foreign Minister, Javad Zarif, said Iran runs security in the Strait of Hormuz and will no longer tolerate “maritime offences” there. This was their comments after they seized another tanker over the weekend for smuggling fuel.
Iraq’s Oil Minister said it has no connection with an oil tanker seized by Iran in the Gulf for smuggling fuel. It said Iraq does not export diesel to the international market.
President Trump imposed more sanctions on Venezuela. The Wall Street Journal said,” the Trump administration imposed a total economic embargo against the government of Venezuela, a significant escalation of pressure against the regime of President Nicolas Maduro and countries including Russia and China that continue to support him. This move puts Venezuela on par with North Korea, Iran, Syria and Cuba the only other counties currently under such stringent US measures.