U.S benchmarks are surging into U.S hours Friday in hopes of an interim trade deal. President Trump has lauded progress between high-level delegates and is set to meet Vice Premier Liu He today before the closing bell.
Geopolitical risk and oil prices are rising as President Trump says that Trade talks are “going really well” and reports of a missile attack on an Iranian oil tanker.
Oil futures prices on the opening of the electronic session tested the lower end of the trading range on a report from the Honk Kong Press that “US-China talks are expected to last for only one day! No progress made.”  
The crude oil market is still fixated on trade war news yet behind the scenes, there is a growing supply issue especially when it comes to distillate fuels. Oil prices sank as relations between the U.S. and China seemed to sour.  
Oil prices had been rallying overnight on Chinese trade talk hopes but a drop in German factory orders and reports that China is looking to strike back at the U.S. over its Chinese tech list raised more concerns about oil demand.  
The oil market is finding stability as it realizes that last week’s deep slide was overdone. Oil is finding support on more surveys that show a big drop in OPEC oil production.  
he oil market is fixated on macro-economic issues and not necessarily current supply or demand. The weak ISM service sector number added to oil demand fears even as data showed the global oil demand growth in August.
While the oil futures market failed to focus on the bullish aspects of the report because of the worries about a global manufacturing slowdown, the truth is that a slowdown in petroleum demand is not showing up in U.S. data.
The oil inventory report is not fitting the bearish narrative that is being exposed as global manufacturing data takes a dive.
Oil prices got crushed at an end of the quarter, holiday-thinned market. Weak global manufacturing numbers, as well as claims by Saudi Aramco that production is restored, found the oil market lacking a bid.