The statement of the American president about the increase of duties on Chinese goods not only threatened the future negotiations of the states and “dropped” the Chinese market, but also forced the oil prices to fall.
On Monday morning, July futures for Brent crude oil are being traded at a price of $ 69.4 per barrel. At the last session, their price was equal to 70.85 US dollars. WTI contracts for June have dropped on the NYMEX to $ 60.56. On Friday, the price closed at $ 61.94.
The confusion began with Trump’s tweet, in which the odious president wrote that on Friday he would raise duties on Chinese goods worth $ 200 billion from 10 to 25%. He also mentioned that the rest of the imports from China amounting to more than 325 billion US dollars would also soon be taxed at 25%.
The American leader does not like the very slow pace of negotiations and is not happy with the fact that the Chinese side wants to change certain terms of the agreement.
The Wall Street Journal has already written that such a statement came as a surprise to official Beijing and that there is a risk that China will simply cancel the talks scheduled for this Wednesday. OCBC economist Howie Lee believes that if the negotiations are canceled, the price of the American oil will roll back to the minimum values of this year, i.e. to $ 50 per barrel.
The failure of the negotiations will have a negative impact on the global demand balance. In addition, the effect of reducing oil reserves in America will fade away. But it was the effect which kept prices throughout the last month.
The material was prepared with the participation of Katya Gordon,
a leading analyst of the brokerage company CT Trade