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The decline in oil prices: how trade tensions correlated demand

05 August 2019

The decline in oil prices: how trade tensions correlated demand

Politics Donald trump significantly affects changes in the economy, because even last year, trump started a trade war with China by installing an additional fee in the amount of 25%. The leader of the USA, apparently, is not going to stop focusing on the introduction of additional tariffs, which would entail limiting the demand for fuel from the world leaders in oil consumption.

 


The market price of oil company West Texas dropped to -1,3% (54,93 USD per barrel), while, as Brent company incurred a loss of -1.5% (60,97 USD per barrel).
Since September 1, the US will impose an additional 10 percent tariff on imports of raw materials from China. China's President is confused, if a trade deal with America will not take place in the shortest possible time, the rate will be levied on almost all Chinese imports in excess of 300 MLD USD. But XI Jinping is not going to make concessions, and this will lead to the end of the trading month truce between the US and China.

 


Since December 2018, the people's Bank of China set the average daily point trading band, which led to the depreciation of the yuan. The percentage ratio of the Chinese Renminbi fell by -1.4%, the reason for the new sanctions from the United States that brought the war to a new level. Due to the depreciation of the yuan to the dollar, Chinese imports of oil to increase significantly in USD.

 


In June of 2019 the supply of oil to the United States increased by 260 thousand barrels per day, which led to record - 3,16 thousand million barrels per day.

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