Oil Heads Toward Bear Market as Trade Tensions Feed Demand Fears - Bloomberg

Oil Heads Toward Bear Market as Trade Tensions Feed Demand Fears - Bloomberg:

Brent oil slid below $60 a barrel for a second day as investors weighed the prospects of a prolonged standoff between the U.S. and China, following the Trump administration’s labeling of the Asian nation as a currency manipulator. 


London-traded futures erased an earlier rally to fall about 0.5% on Tuesday. A move by the People’s Bank of China earlier in the day to strengthen the yuan wasn’t enough to stave off worries about the escalating dispute between the world’s largest oil consumers. A close below $59.65 a barrel would put the global benchmark price in a bear market, down 20% from its late-April peak.

“We shouldn’t underestimate the potential impact of a full-blown trade war between the world’s two biggest economies,” said Bart Melek, head of global commodity strategy at TD Securities. “This could very well mean we as a market significantly overestimated demand growth for oil and we could easily be in a surplus situation in 2020.”