China Tariffs on U.S. Crude Not Game-Changing Event

10 August, 2018, 14:46 | Author: Corey Lynch
  • Crude oil posted its worst monthly loss in two years in July

Benchmark U.S. crude oil lost 26 cents to $66.68 a barrel in electronic trading on the New York Mercantile Exchange.

Brent crude futures fell $2.73 to $71.92 a barrel, a 3.7 percent loss, by 12:33 p.m. EDT (1633 GMT). Helping to underpin prices is the first round of USA sanctions against Iran which came into effect earlier in the week.

All the Persian Gulf oil exporters such as Saudi Arabia, Iran, Iraq, Kuwait, Qatar, the UAE, and Bahrain, ship their crude oil to the worldwide market through the Strait of Hormuz. USA refineries produced about 9.9 million barrels of gasoline a day last week, down by about 600,000 barrels compared to the prior week.

On the 4 hour chart, crude oil is crossing above a solid resistance level of $69.45.

Other than the four key importers, the European Union has said it will not enforce U.S. sanctions which are to be imposed on Iran's oil and banking sectors on November 4.

Jameel Ahmad, global head of currency strategy and market research at FXTM, said the escalation "is just reminding investors that their trade war concerns are going nowhere anytime soon".

"Fears of the impact of sanctions on China, Iran, Russia and Turkey did not help and another big drop in US gasoline demand has some anxious that U.S consumers were showing resistance to higher pump prices", Phil Flynn, a market analyst at the PRICE Futures Group in Chicago, said in a daily emailed market report.

The prices of both Brent and West Texas Intermediate (WTI) dropped by over 2.5 percent on Wednesday morning following the reported draw of crude oil inventory by U.S. Energy Information Administration.




Crude oil continues to rise bullish as traders remained anxious over revived US sanctions against major crude exporter Iran. If more oil leaves the market than expected then the bulls will win the supply/demand battle.

"Oil had been largely immune from the escalating trade dispute, however the recent application of tariffs by China on United States petroleum products does represent a step change for the energy market", said Daniel Hynes, a Sydney-based analyst at Australia & New Zealand Banking Group Ltd.

U.S. economic sanctions against Iran took effect this week.

Meanwhile, stockpiles of gasoline and distillates, which include diesel and heating oil, rose more than expected.

Furthermore, oil prices were dragged down by the increasing output of the Organization of the Petroleum Exporting Countries (OPEC) and Russian Federation. "Unless Iranian oil output falls dramatically, we won't change our view that the Gulf economies will experience a modest recovery over the coming quarters", they said. An earlier report from industry group the American Petroleum Institute had suggested inventories fell by 6 million barrels.

Week over week, USA crude oil exports rose by 540,000 barrels a day, and US production dipped by 100,000 barrels a day to 10.8 million barrels.

Exports to Japan surged to a seven-month high as refiners rushed to secure as many cargoes as possible before United States sanctions are re-applied.

Recommended:

  • Liverpool boss Klopp admits everything open for deadline day: Ings...?

    Liverpool boss Klopp admits everything open for deadline day: Ings...?

    Liverpool should have taken the lead moments earlier when gifted a hugely generous penalty by referee Michael Oliver . "We have to see how he reacts".
    Blend of novices, veterans to fly on first private U.S.  spaceships

    Blend of novices, veterans to fly on first private U.S. spaceships

    He retired from NASA after commanding the final shuttle mission in 2011, and eventually joined Boeing to help develop Starliner. He is a colonel in the Air Force, where he was a flight test engineer before being selected as a NASA astronaut in 2009.
    DEP: Rains, flooding create high level of West Nile in PA's mosquitos

    DEP: Rains, flooding create high level of West Nile in PA's mosquitos

    Those zip codes include 40212, 40213 and 40214, according to the Louisville Metro Department of Public Health and Wellness. Since DEP first began monitoring for the virus in 2000 there have been 33 fatal cases of West Nile virus in Pennsylvania.
  • Cleveland Browns: 3 impacts Corey Coleman trade has on team

    Cleveland Browns: 3 impacts Corey Coleman trade has on team

    We've all seen the return that Cleveland received from their trade with the Buffalo Bills , yet it's still too shocking. Coleman played in nine games last season for the Browns, making eight starts; he missed seven games with a hand injury.
    Donald Trump Insults LeBron James & Don Lemon In Latest Tweet

    Donald Trump Insults LeBron James & Don Lemon In Latest Tweet

    Trump claimed previous year he disinvited from the White House, wrote "Keep doing you" with a link to James' interview. In September, James called Trump a "bum" for uninviting the NBA-champion Golden State Warriors to the White House.
    Trump

    Trump "needs to put a pin in that", says panelist

    Special Counsel Robert Mueller is investigating U.S. intelligence findings that Russians conspired to sway the election in Mr Trump's favour.
  • Rick Gates, testifying in Manafort trial, admits to affair, London apartment

    The case has little to do with either man's work for the Trump campaign, which has only tangentially figured in the trial. That's important to prosecutors, who need to not only prove Manafort skimped on paying millions of dollars in taxes.
    Largest wildfire in California history still growing

    Largest wildfire in California history still growing

    Keith Gilless is a UC Berkeley professor of forest economics and chairman of the California Board of Forestry and Fire Protection. An inmate firefighter pauses during a firing operation as the Carr fire continues to burn in Redding, California on 27 July 2018.
    Manchester United Open Talks With Agent of Everton and Wolves Target

    Manchester United Open Talks With Agent of Everton and Wolves Target

    The Daily Mirror claims that Everton have seized on the failure and are set to sign Mina for £28.5m. Mina's adviser, Felipe Russo, "angered" United by constantly demanding increased payments.
  • Tottenham's Mauricio Pochettino happy with squad despite no signings

    Tottenham's Mauricio Pochettino happy with squad despite no signings

    Paul Merson is backing Tottenham Hotspur to finish in fourth place ahead of Arsenal in the Premier League table this season. To keep our best players was our objective and goal and we have achieved that - at the moment.
    Yemen rebels announce temporary Red Sea ceasefire

    Yemen rebels announce temporary Red Sea ceasefire

    The Saudi-led coalition denied responsibility for the attack, saying it did not carry out any operations in the area that day. He called for "an immediate ceasefire" and urged Yemen's warring parties to join United Nations peace efforts.
    Aussies eye PGA bounce-back after WGC slide

    Aussies eye PGA bounce-back after WGC slide

    The world No.3 has 2014 WGC-Bridgestone victor Rory McIlroy (67) and Ian Poulter (70) snapping at his heels three shots back. His grandparents, Paul and Phyllis Thomas, watched him win for the first time on the PGA Tour.


Popular

First Lady Melania Trump's parents become U.S. citizens
The Times noted that the couple would have to have their green cards for five years to become eligible for citizenship. Viktor and Amalija Knavs listen as their attorney makes a statement in New York , Thursday, Aug. 9, 2018.

Chief Minister Naveen Patnaik expresses grief over death of M Karunanidhi
Several decisions and measures related to the growth of industry in the state were taken during his various tenures. As a writer, he wrote poems, screenplays, novels, biographies, historical novels and screenplays.

Salon staff beat customer with brooms after she refuses to pay
A family member of the victim says the situation was blown out of proportion, but community activists say it's nothing new. The Brooklyn District Attorney's Office says prosecutors are examining more evidence and may alter the charges.

Newcastle confirm swap deal with West Brom for Salomón Rondón
Switzerland worldwide defender Fabian Schar has the makings of a £3m bargain while Ki Sung-Yeung looks an astute free transfer.

McGregor and Nurmagomedov agreed to battle known date
This battle should be the most anticipated event of the year and will be part of UFC 229. His lightweight title was stripped and subsequently claimed by Nurmagomedov in April.

Crude palm oil futures gain 0.27%
US West Texas Intermediate (WTI) crude futures were at $68.70 a barrel at 8.47am GMT, down 26c from their last settlement. Even with last week's rise, overall USA crude inventories are below the 5-year average of around 420 million barrels.

Saudi Arabia asks Canadian ambassador to leave
The Kingdom of Saudi Arabia expresses its absolute and categorical rejection of the position of the Canadian Government. More than a dozen women's rights activists have been targeted since May.

Multiple protests in Iran over currency drop, economic woes
In August and November Iran faces two new waves of sanctions that will shut off their access to U.S. banking and oil exports. Last month, the U.S. rejected an European Union appeal to allow exemptions to the sanctions regime.

Meet Maurizio Sarri’s backroom staff at Chelsea
The Italian said that was one of the reasons his team were soundly beaten 2-0 by Manchester City in the Community Shield . I played against City last season, played them in their best moment of the season.

China to Respond If US Provokes Escalation of Trade War - Foreign Ministry
President Trump plans to impose 25 percent tariffs on $200 billion worth of imported Chinese goods, a report said on Tuesday . A first round of tariffs came into effect on 6 July, when the USA imposed 25% taxes on $34bn of Chinese imports.