Bank of America Sees Risk of $30 Oil If China Devalues Yuan - Bloomberg

Bank of America Sees Risk of $30 Oil If China Devalues Yuan - Bloomberg:

A further deterioration in relations between the U.S. and China could set off a chain of events that would push oil down more than 50% to as low $30 a barrel, according to Bank of America Merrill Lynch.

President Donald Trump may decide to raise tariffs on the remaining $300 billion of Chinese imports if he doesn’t like what he hears from Chinese President Xi Jinping at this weekend’s G-20 summit in Osaka, Francisco Blanch, the bank’s global head of commodities, said in an interview in Singapore.

That may cause Chinese authorities to let the yuan weaken, making oil that’s priced in dollars more expensive in the world’s largest importer and stunting demand growth, he said. Beijing might also decide to ignore Washington’s sanctions against Iran and resume crude imports from the Persian Gulf country, Blanch said.