Trump Announces New Tariffs
Oil prices are rising firmly this weekly this week in response to a tightening in the crude supply outlook as a result of fresh US tariffs. Yesterday, Trump announced tariffs on countries importing Venezuelan gas and oil, along with the threat of further tariffs if restrictions are not adhered to. The 25% levy, which has been applied to countries including China, has had a meaningful impact on global supply with crude futures up around 6% off the March lows.
Chinese Demand
The tariffs on China in particular are having a big impact. Coming at a time when the domestic demand outlook is improving there, the restrictions on crude imports are expected to add to price rises. Recent measures announced by the Chinese government aimed at bolstering household incomes and consumer spending are expecting to further lift demand this year, creating expectations of a continued recovery in crude near-term as the market adjusts to the new measures.
EIA Data
Looking ahead this week, traders will be watching the latest EIA inventories update tomorrow. US demand has faltered recently. However, with recession fears seen cooling this week in response to news that Trump will take a more limited approach with tariffs on April 2nd, demand could start to pick up again near term which should further boost prices, if seen.
Technical Views
Crude
The rally in crude has seen the market breaking back above the 67.45 level. Given this is a big, multi-year support zone, the recovery here is important and puts focus on a move back up to 72.61 and the bull channel top. If bulls can break higher there, 77.64 is the next target.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.