Brent oil price back in the seventies as demand for oil could continue to increase despite fragile U.S./China trade negotiations
The trade talks between the U.S. and China continue today even though the U.S. hiked tariff rates on imports of Chinese goods from 10% to 25% and China stated that it will retaliate the move. Consensus across the markets is that the trade war between the two huge countries comprise the biggest threat to economic growth at the moment. However, the U.S. Energy Information Administration still expects global oil demand to rise by 1.4 mbpd in 2019. According to the International Energy Agency, the two countries consume 34% of total global oil consumption.
Supporting oil prices at the moment is also the expiration of U.S. waivers for importing Iranian oil to a row of countries as well as dropping Venezuelan crude oil production along with the suspension of oil flows from Russia to European refiners due to contaminated oil. The U.S. sanctions against Venezuela likely entail continued lower exports from the country.
Yesterday, 228.000 Initial Jobless Claims were reported for the week ending May 4th declining more than expected and the US trade deficit widened to $50 billion in March from an eight-month low of $49.3 billion in February.