After a steep sell-off on Friday, oil prices recovered a significant amount of their losses yesterday. This morning, prices are trading flat after giving up some early morning gains. Crude oil prices are trading at $56.51, just pennies away from yesterday’s close.
Fuel prices are mixed this morning. Diesel prices are trading at $2.0049, down a penny from yesterday’s close. Gasoline, on the other hand, is trading higher at $1.7585, up a penny since yesterday.
Driving market bullishness is anticipation of a US-China trade deal, which may even include rescinding current tariffs. The deal impacts oil in two significant ways. First, China represents a significant portion of anticipated oil demand growth this year; if their economy stumbles, global oil demand would be disproportionately affected, causing oil prices to fall. Second, a trade deal would make it easier for China to buy US crude, which would raise the cost of WTI crude oil specifically. While not a global issue, this would have an impact on oil prices within the US.
Weighing on oil prices today is the reopening of Libya’s El Sharara field, which produces 300 kbpd of oil at full capacity. The field had been under force majeure after militants took over the field, but the National Oil Company has finally allowed production to resume.
