The Energy Report gave an early warning about the state of the crude market we are in now. We warned producers and users of oil, gas and diesel to hedge. Now there are reports of airlines reducing capacity and businesses that are struggling due to higher crude and product costs. The recent oil price strength was born in the price crash in 2015 as it forced companies to cut investment and incorrect assessments about shale oil and the outlook for demand.
The deadline has passed. President Donald Trump fired the trade war shot heard around the world as he suggests the United States is mad as heck and isn’t going to take the record $375 billion trade deficit with China in 2017 anymore. Around $34 billion in tariffs went into effect at midnight with China calling it the start of the largest trade war in history and retaliating by adding $34 billion dollars of its own tariffs.
As expected, gold made nice three waves of correction back to projected 1250 support level, but there can be room for deeper and more complex correction down to around 61,8% Fib. retracement and 1245 level.
Hail to the tweet! President Donald Trump is calling out OPEC and telling them now is the time to lower prices. The tweet this time had less of an oil price impact from previous tweets, as many are starting to realize OPEC can’t do much. The President tweeted that “The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two-way street. REDUCE PRICING NOW!”
The U.S. dollar ended higher for the third consecutive month in June and made a positive start to the new month and quarter on Monday. However, today it has given up Monday’s gains and was, therefore, trading flat on the week at the time of writing.
Oh, say can you tweet, by the dawn’s early light? The global oil markets are still rolling after President Donald Trump tweeted that maybe the Saudis had agreed to increase output by as much as two million barrels to help replace Iranian supply that the Trump Administration wants to see at zero by early November.
So, President Trump is using his leverage with the Saudis saying you must replace Iranian oil because we have got your back against your nemesis. The Saudis, of course, must look like any move they make is within the boundaries OPEC and Russia has set. Iran Oil Minister Bijan Namdar Zanganeh said any production increase above limits agreed to by OPEC would “breach” the deal, according to a letter he sent to OPEC President Suhail Al Mazrouei and distributed by the Iran Oil Ministry’s news service Shana. OPEC should reject the U.S. call for a production increase which is “politically motivated against Iran,” he said, as reported by Bloomberg.