Oil prices are once again pushing towards their Wednesday highs of $62.99, the highest level oil has traded in months. Today, crude oil is currently trading at $62.54, up 44 cents from yesterday’s close. It’s worth noting that Brent crude briefly surpassed $70/bbl, a level not seen since Nov 18, before turning lower heading into the close.
Fuel is also trading higher this morning, with gasoline and diesel seeing similar support. Diesel is currently trading at $2.0191, up 0.6 cents. Gasoline is also up 0.6 cents, trading at $1.9456.
As Britain and the EU stand on the edge of a relationship cliff, the US and China are finally on the cusp of mending trade relations. Trump indicated the “epic” deal could be signed by the end of April, though there are still a few issues left to be resolved such as enforcement and how quickly tariffs could be lifted. The trade war has been weighing on both economies, so normalized trade relations – whatever they may look like – will jumpstart interactions between the two nations, resulting in higher economic growth and stronger oil demand.
While Saudi Arabia tends to dominate oil headlines, US production is the real driver behind oil prices currently – or so says Wells Fargo. In a recent interview, their head of asset strategy noted that while Saudi Arabia can swing supplies higher or lower, US production is more relevant for predicting oil prices. Because American product floods the market whenever prices become favorable, they tend to drive oil towards the US shale-oil breakeven level – currently around $40-$45 today.