The price of oil has moved higher on a spot basis in holiday thin markets. West Texas Intermediate crude moved from a low of $57.61 to a high of $58.18, higher by 0.22%.
Oil has been moving along in a sideways chop since rallying from a low of $54.86bbls on the 20th November where it printed a fresh high for the month on the $58 handle. Indeed, the main focus has stayed with trade-deal progress although markets have been less inclined to jump on every headline or comment from either side of the trade dispute, Beijing or Washington.
The latest development in the saga came after yesterday’s close and when traders had already packed up and headed home to prepare the Thanksgiving Turkey. President Donald Trump dropped the bomb by signing the Hong Kong bills into law – a move that was certain to upset the Chinese and antagonise what little progress had been made towards a so-called “Phase-One” deal. Markets did respond, inevitable ina risk-off fashion, although the moves had not been as deep as one might have expected, likely down to the lack of liquidity and a reluctance to trade the news. Throughout the Asian session, there were titbits and reports of various statements from Chinese officials warning of retaliation ‘IF’ the US continues on in this way.
China’s Foreign Ministry
- Opposes US law on Hong Kong.US attempts to move in on Chinese affairs are doomed to fail.
- Severely meddles with China’s internal affairs.
- Severely violates international law.
- The Act seriously interferes in the internal affairs of China violating international laws and basic principles of foreign relations. China will take firm countermeasures if the US continues in this way.
- US will have to shoulder all consequences if it continues this way.
- All in all, however, the markets are taking the act in its stride.
“While this worsens the negotiation climate for a trade deal, it is still our belief that the sides will be able to keep the Hong Kong issue separate and land a phase 1 deal before the 15 December when US-China import tariffs are scheduled to rise by 15%,” analysts at Danske Bank explained.
Meanwhile, it is eye son OPEC. Analysts at TD Securities said, in light on the December 6th and 7th meeting in Vienna, that “large surpluses in early 2020 still linger on the horizon, especially as OPEC+ will likely hesitate to deepen output cuts when they meet in December, which suggests this latest rally will likely run out of steam.”
WTI levels
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