Give Trade A Chance

All we are saying is give trade a chance. A trade truce with China and an OPEC deal to cut supply with Russia is sending oil and the rest of the commodity world on a rampage. Not only did the trade truce increase demand expectations for oil, the crash in price forced OPEC and Russia into a production cut deal, rumored to be 1.5 million barrels. The crash in oil even caused Canada to call on Alberta oil producers to cut production to try to save its oversupplied blend and cheap priced crude. I wonder if President Trump is going to tweet about that? To add even more drama to this game-changing weekend, Qatar announces it was withdrawing from the Organization of Petroleum Exporting Countries “OPEC” effective 1 January 2019.

So is oil going up more because of the trade truce or the OPEC plus Russia and now I guess Canada production cut? So now does Canada cutting production means the oil cutting coalition is “OPEC plus 2” now? Well, the answer is both. The Trade truce is something the markets have been clamoring for and now they are going to get it. This will improve global business confidence and open the door for even better global trade in the future.

President of the United States, Donald J. Trump and China’s President Xi Jinping, according to the White House on Trade, agreed that on January 1, 2019, the U.S. will leave the tariffs on $200 billion worth of product at the 10% rate, and not raise it to 25% at this time. China will agree to purchase a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other products from the United States to reduce the trade imbalance between our two countries. China has agreed to start purchasing agricultural products from our farmers immediately.

President Trump and President Xi also agreed to “immediately begin negotiations on structural changes with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft, services and agriculture. Both parties agree that they will endeavor to have this transaction completed within the next 90 days. If at the end of this period, the parties are unable to reach an agreement, the 10% tariffs will be raised to 25%”.

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