On Wednesday, U.S. President Donald Trump crushed any hopes of a trade deal with China when he announced that China “broke the deal” and that, as a consequence, the U.S. will enforce even higher tariffs on some imports from China starting on Friday, May 10. Is oil resolving trade war in talks?
According to some experts, however, the dip in crude prices is just temporary. With global crude supply tightening thanks to sanctions on Iran and Venezuela, as well as a surprise decline in U.S. crude production, long-term price projections are looking up. In fact, West Texas Intermediate and Brent futures are up by 30 percent or more year to date, and MarketWatch reports that analysts at Barclays are extremely optimistic, already increasing their third-quarter forecasts by $4 each for both benchmarks.
The United States has become one of the most important energy producers–and currently the fastest growing producer of “global energy supplies” — thanks to the shale oil boom in the West Texas Permian Basin. At the exact same time, China has become the fastest-growing energy consumer, especially when it comes to oil and liquefied natural gas–both of which the U.S. has in spades. “So while the dispute around tariffs goes far beyond trade balances,” argues Sheppard, “energy is one area where the two countries have a mutual interest in finding common ground.
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