International trade friction escalation weakens demand

As the market prepares for the long-term downturn in the US economy, oil prices have plummeted. The escalation of international trade frictions may slow global economic growth and weaken fuel demand.

As the market prepares for the long-term downturn in the US economy, oil prices have plummeted. The escalation of international trade frictions may slow global economic growth and weaken fuel demand. Economic data from the United States, Japan, Germany and the European Union show that weak energy-intensive manufacturing has prompted investors to reconsider their macroeconomic expectations and future demand for crude oil.

US Secretary of State Pompeo recently stated that the United States is ready to negotiate with Iran when Iran is ready. There are signs that tensions in the Middle East are easing. The Trump administration has taken measures to prevent oil prices from soaring. US crude oil inventories increased by 4.7 million barrels last week. Gasoline inventories increased by 3.7 million barrels, which was also pressured by oil prices due to reduced refinery activity. However, the fear of the geopolitical situation still partially supported the oil price. Iran sent a letter to the United Kingdom, France, Germany, China and Russia, and passed the decision to suspend the terms of the Iranian nuclear agreement. Iranian President Rohani also hinted that the five countries can implement the principle of safeguarding the benefits of Iran within 60 days, otherwise Iran will tear up more agreements.