Crude Oil Weekly Forecast: Curbed by Trump's Tariffs, Growth Fears
Crude Oil Price Fundamental Forecast: Neutral
Q3 2019 Oil Forecast and Top Trading Opportunities
Oil Will Struggle Against an Unfriendly Backdrop
Oil’s mini-revival came to a shuddering halt Thursday after US President Donald Trump ramped up the
trade dispute with China by announcing that he will impose a 10% tariff on $300 billion of Chinese
imports on top of the 25% tariff already in place on $250 billion worth of Chinese goods. China has already
said that it would retaliate, further adding to the trade war that is damaging global growth prospects.
And China may not be the only one in Trump’s crosshairs with the President expected to make an announcement later today regarding trade with the European Union with tariffs on European (German) auto-makers mooted. This would come at a bad time for the EU with recent data showing the economy continuing to slow down, with the manufacturing sector the worst affected. President Trump would have seen today’s trade balance figures (-$55.2b a five-month wide) as a vindication of his tough protectionist policy. Next week’s calendar has trade balance figures from both China (Thursday) and Germany (Friday) which may see further Trump tweets hit the screen.
Against this harsh background, oil is unlikely to push significantly higher in the near-term. While Thursday plunge is being partially trimmed, the price of oil will struggle to move higher in the short- and medium-term with strong resistance between $58.80/bbl. and $61.00/bbl.
US Crude Oil Daily Chart (October 2018 – July 26, 2019)
The IG Client Sentiment Indicator shows retail traders are 66.9% net-long US Crude Oil, a bearish contrarian bias. However daily and weekly changes give us a stronger bearish US Crude Oil bias.
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