Lost Optimism

After opening with a bit of optimism about progress in the U.S. China trade talks in the Sunday night session, oil quickly reversed course on weak economic data from China. China’s December exports fell by 4.4 percent from last year, the biggest drop in 2 years. Chinese imports also plunged by 7.6 percent, the biggest drop since 2016.

This is raising concerns of slowing global growth especially after weak industrial output data from Europe. It also raises the question of whether or not the Chinese stimulus, that has been announced, will be enough to ward off a major slowdown in the Chinese economy.

At the same time, it puts more pressure on China to get a trade deal with the U.S. That might be a bit harder after China reported that China’s trade surplus with the U.S. increased by 17 percent from last year, coming in at  $323.32 billion in 2018. That according to Reuters, is the highest on record dating back to 2006. Exports to the U.S. increased by 11.3 percent while imports from the U.S. to China rose 0.7 percent.

Bottom line China needs a deal if they are interested in stopping the free fall in their economy.  While some argue they are playing the long game when it comes to this trade war, they really are going to have a hard time recovering if they let this linger much longer.

In the meantime, OPEC over the weekend was congratulating themselves for saving the global oil market and telling us that they were the shale oil producer’s best friend. In fact, if you don’t like OPEC, then just try to imagine a world without OPEC. It’s easy if you try. That’s what OPEC wants you to do.

The Wall Street Journal reported that “Two of OPEC’s most powerful voices defended the oil cartel’s record Monday, saying it wasn’t at risk of disbanding. The statements came in response to revelations late last week that a Saudi-funded research effort is exploring how a possible OPEC breakup might impact oil markets. The research effort, first reported by The Wall Street Journal, follows several recent accusations by President Trump that the 15-nation Organization of the Petroleum Exporting Countries is driving oil prices higher.

1 2 3
View single page >> |

Disclosure: Make sure you prosper all week. Stay tuned to the Fox Business Network where you get the Power to Prosper. Trade updates and levels. Call me at 888-264-5665 or email me at  more

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.