Top Trading Lessons: Global Economic Weakness Should Damage the Oil Price, So Why Didn’t It?
Analysts and traders spent much of 2019 worrying about weakening global economic growth, and they were right to be concerned. As the International Monetary Fund reported late in the year, after slowing sharply in the last three quarters of 2018, the pace of global economic activity remained weak.
Momentum in manufacturing activity, in particular, weakened substantially, to levels not seen since the global financial crisis, while rising trade and geopolitical tensions increased uncertainty. Lower growth means less demand for crude oil so the oil price should have fallen back – but it didn’t.
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