Oil shot up more than 4 per cent on Tuesday after the U.S. said it would delay the 10 per cent tariff on some Chinese products, including laptops and cell phones. The move eased fears over the fallout from the trade war.
The delay gives hope to a skittish market that the trade war really won’t go on forever.
Brand Spur reports that for WTI, oil prices had climbed 4.13% to trade at $57.20 as at the time of filing this report. Brent Crude was trading up even more at 4.68%, at $61.31—resuming it’s over $60 per barrel that it had fallen under during the first week of August as the trade war stoked fears of souring oil demand growth.
The international oil benchmark, Brent crude, had tumbled last week Wednesday to $56 per barrel, its lowest level in seven years as the United States-China trade war worries gripped the market. The decline in oil price imposes a serious threat to Nigeria’s economy as the 2019 budget is based on an oil benchmark of $60 per barrel.
In addition, the Nigerian Bonny Light rose by 4.07 percent or $2.41 on Tuesday to sell at $61.56 per barrel on the international market, while the Nigerian Brass River rose by 1.29 per cent or $0.76 to trade at $59.83 per barrel, with price of the Nigerian Qua Iboe also appreciating by 1.29 per cent or $0.76 to go for $59.88 per barrel.
The further decline in oil prices followed an unexpected build in US crude supplies and fears of lower crude demand due to the deepening trade tensions
Yesterday was the fourth straight day of gains for the oil prices—the previous gain helped along by Saudi Arabia’s chat with other OPEC producers about what additional steps the group could take to stanch the price bleed that sought to undermine not only Saudi Arabia’s budget which relies heavily on oil, but the much-anticipated public listing of its crown jewel, Saudi Aramco.
Aramco profits fall, but still the most profitable company. Saudi Aramco held its first earnings call with investors on Monday, and also reported profits of $46.9 billion for the first six months of 2019. That was down 12 per cent from the same period a year earlier, the result of lower oil prices. However, that figure still makes Aramco the world’s most profitable company.
In addition to the tariff delay, which will now go into force on December 15, the United States will also be taking some of the items on that tariff list off completely, according to its newest policy document released on Tuesday.
While the list hasn’t been made public, it will include items that will be removed “based on health, safety, national security, and other factors”.