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The bulls are off and running today because there is a bevy of bullish headlines including optimism over a U.S./Chinese trade deal and a missile attack on an Iranian oil tanker.

On Monday October 7, Occidental Petroleum chartered the Very Large Crude Carrier (VLCC) Maran Andromeda to carry oil to South Korea for a record rate of $13.25 million that is set to depart the United States toward the end of November.  The reasons for the spike in freight rates recently for VLCCs is related to sanctions imposed by the United States on China, which is causing oil shippers globally to scramble to find unsanctioned vessels to transport its crude oil.

Earlier today, China announced tariff hikes on $75 billion worth of U.S. products as a retaliatory measure against President Trump’s latest tariff message.  China has decided to apply tariffs ranging from 5% to 10% on the $75 billion worth of products in two rounds.  The first round of tariffs will take effect on September 1, while the second round will commence on December 15.  The state council released a statement saying, “In response to the measures by the U.S., China was forced to take countermeasures.  The Chinese hopes that the U.S. will continue to follow the consensus of the Osaka meeting, return to the correct track of consultation and resolve differences, and work hard with China to end the goal of ending economic and trade frictions.”  The stock market and bond yields fell sharply this morning following the announcement.

Oil markets have been trading lower all day today even after yesterday’s sell off on continued fears of a global economic slowdown exasperated by the trade war and unrest in Hong Kong.