Sun, July 21, 2024

Oil and Petroleum Edge Up, Trade Deal Back in Focus

Wibest – Oil and petroleum: Digital chart showing green arrows pointing upwards beside Brent and WTI.

After a gruesome series of events for the market at the beginning of the year, traders are finally feeling relief. Oil and petroleum prices are edging up in trading sessions thanks to trade war hopes.

So, once again, the focus turns to the protracted trade war between the United States and China. Fortunately, this time, the air around the two giants is clearing up.

After the head-turning tension between Washington and Iran in the past couple of days, the spotlight returns to the tariff war. The much-awaited signing ceremony in Washington is due later this week.

Oil and petroleum prices are regaining their momentum this Monday’s trading session.

WTI crude or West Texas Intermediate contract rose by 0.25% or 0.15 points in today’s trading. WTI crude barrels now trade for $59.19, advancing from its last close of $59.04.

Meanwhile, Brent oil futures, the benchmark for Atlantic-based crude, rose by 0.12% or 0.08 points this Monday. Brent oil barrels currently costs around $65.06, going up from its previous close of $64.98.

After a massive jolt received by oil and petroleum on the first few days of January, prices are back to early December ranges. The tension between the United States and Iran caused prices to jump and plummet at the start of the decade.

Trade Deal Again

Wibest – Oil and petroleum: Oil barrel spilling crude over US dollar coins and bills. Unbelievable as it may seem, it is nice for traders to hear about trade war-related news again. If back then, the market almost had enough, now, it’s good news for them.

Traders have even overlooked the weaker than expected US jobs data recently released. Meaning, the main boost for oil and petroleum prices is the improving trade war sentiment.

The first phase of the trade deal is scheduled to be signed this week. The event should bring stability back in the market and economies affected by the conflict.

The uncertainties between the trade war have caused oil and petroleum prices to move in different directions before. After almost two years of conflict and destabilization, traders will finally feel the air get better.

Beijing has confirmed that Chinese Vice Premier Liu He will travel to Washington for the signing ceremony. This locks the commitment of China for the betterment of both sides and the market.

Both parties are finalizing a bevy of long-term corporate and business deals ahead of the said signing ceremony.

Not Over

Unfortunately, some experts believe that the Washington and Tehran dispute is far from over. This means oil and petroleum contracts aren’t in the clear yet.

According to some analysts, the de-escalation is only temporary, and both parties are still closely monitoring each other. Yes, Iran may have blown US bases within the region after the death of Soleimani. But there are practical and political factors constraining Tehran’s “retaliation.”

Concerns and skepticism were also raised after Iran “willingly” claimed responsibility for the Ukrainian passenger plane.

According to an expert, Iran’s natural response to allegations would be to deny its involvement immediately. However, that wasn’t the case.

Some also believe that Iran’s strategy will remain the same, along with US policies. This is especially as the country’s economy continues to struggle, and the anti-American sentiment in the country increases.


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