World Oil Market
It has been a wild Monday for traders after President Trump tweeted yesterday that the United States will increase tariffs on $200 billion of Chinese imports, which, is casting doubt on the likelihood of a successful U.S. and Chinese trade deal.
China and India have had considered on creating a “club” which will negotiate better prices with oil exporting countries and will be looking to import more U.S. crude oil in order to reduce OPEC’s sway. Two of the world’s largest oil importers, second and third respectfully, have exchanged senior level visits several times to discuss the premiums placed on oil sold to Asian nations. India, which imports more than 80% of its oil requirements, has seen oil prices increase to more than $75 a barrel.
Oil prices are taking a breather today after Wednesday’s strong rally due in large part to the gasoline inventory draw and low production levels in Venezuela.
Nigerian President Muhammadu Buhari, the 76 year old former military ruler, has been re-elected. Constant threats to the flow of crude from armed groups and thieves, Buhari has plans to develop a backbone of stable power, roads and rail lines for agricultural expansion and industrialization in Africa’s most populous nation. Providing two-thirds of government revenue for Nigeria, the President needs all the money he can get from oil. “Oil revenue is still what dictates government spending and they will need to keep production going,” said Jubril Kareem, a Lagos-based analyst at Ecobank Energy Research.