Another shock to Crude Oil prices came from China which plans to tax a host of American goods including crude oil starting September 1,  in a counter move to the Trump Administration’s latest round of tariffs.

That would make crude from the Permian Basin about $3 a barrel more expensive to Chinese buyers, rendering it less attractive.

Bloomberg:

Six ships carrying about 12 million barrels of U.S. crude are headed to China just as Beijing prepares to impose its first-ever levy on American oil next month.

While the cargoes could be diverted, the shipments highlight the growing demand for U.S. crude in Asia even as tensions escalate between the world’s two biggest economies. China, briefly a top buyer of American oil, has scaled back shipments since the trade war began.

The six ships, scheduled to dock in China through October, could be rerouted and the cargoes resold for better value. U.S. oil that is sometimes shipped to the Chinese market from transshipment zones in Malaysia and Singapore or the Caribbean also could get directed elsewhere.

As I mentioned in my latest Crude Oil report, there is no major fundamental fact that could send Oil Prices higher medium term.  You can read the full report: Crude Oil Forecast: Lack of Demand vs ARAMCO IPO

Additional to lack of Global Oil demand, China’s latest plan to tax U.S Crude Oil as a response against U.S. Tariffs would add a heavy weight on Crude Oil prices.

In my latest report, I have referred to news which was published on CNBE, regarding China-Iran Oil Trade.

“China – Iran Oil Trade:vIt is worth to focus on CNBC News: Brent and WTI price could crash if China buys Iranian oil. Bank of America is warning oil prices could potentially crash by $30 a barrel if China ramps up Iranian crude purchases. The report summarized: Bank of America Merrill Lynch warns the oil price could slip sharply if China buys Iranian oil. Beijing could undermine Washington’s foreign policy stance by ignoring U.S. sanctions placed on Iran.”

Recent developments indicate that this news is likely to happen to come true medium term.

Technically:

The U.S. Crude Oil prices hit our near term target 53.20 and ended the week at 53.85.

After the false breakout of the triangle, we see WTI retesting the triangle. As I have mentioned in my latest forecast, WTI needs to make Daily Closing below 53.13 to continue its bearish move.

Under the current fundamental conditions, I expect the decline in oil prices to continue. As shown in the chart, Daily Closing below $ 50 will accelerate the downward trend in prices. Below 50$, Oil Prices may find medium-term support at 46.80.

Our Price Forecast:

Week Ahead: 51.60$ 50.80$ 50.00$

Medium Term: 48.50$ 46.90$

Long Term: 44.00$ 38.00$ 32.00$