Following the successful trade negotiation between the U.S. and China, the trade war that threatened the demand for raw materials started to calm down. This allowed oil and most commodities, excluding gold, to see their price rise.
Both nations’ delegates met over the last weekend in Switzerland. After a long discussion, China promised to cut tariffs on U.S. goods from 125% to 10% while the U.S. agreed to slash its levy from 145% to 30%. These reductions would last for 90 days, according to the agreement.
Following the event, West Texas Intermediate crude found its price rose 1.5% to $61.95 per barrel, with copper increasing 0.8%. Meanwhile, in Europe, their natural gas, soybeans and iron ore exhibited an upward trend. In addition, several top mining companies found their shares surged.
Founding partner of Again Capital LLC, John Kilduff, stated despite the positive sign, the demand for oil in the short term has already been affected, with several experts having already reduced forecasts. Regardless, Kilduff added that the easing of trade war has lessened some downside pressure, helping set a price floor around $60 per barrel.
On top of that, besides the negotiation, the ease in the commodity market was also caused by the positive signal regarding nuclear talk between US and Iran last Sunday. Many are keeping an eye on President Donald Trump’s Middle East trip as he soon will visit Saudi Arabia, OPEC’s de facto leader.
