Weekend Review: Oil Rises After OPEC Meeting As China Halts Trade Talks

This weekend, China announced that it would halt all trade negotiations with the United States. This happened after the US issued sanctions on China for its purchases of Russian military equipment. This was a blow to free traders who hoped that the two countries would come to a deal. Over the weekend, China summoned its US envoys to discuss the sanctions. The latest development comes after China concluded that making a trade deal with the US was difficult. This is because China is unlikely to sign a deal that goes against the strategies like joint ventures that have built its economy. In the new decision, the country hopes to influence the American elections in states like Iowa where Donald Trump won.

An important OPEC meeting happened this weekend to discuss the key issues in the oil market and the impact of Iran on the prices. After the meeting in Algiers, the officials said that they saw no need for increasing output despite the increasing pressure from the United States. The latest decision by OPEC is aimed at accommodating Trump’s demand for lower oil while supporting the price. In recent months, the US has become the world’s biggest producer of crude oil. The only problem facing producers is the lack of enough truck drivers to take the crude to the refineries. This is an interesting fact because more foreign truck drivers can help the US support the oil prices. Trump is, however, an immigration hawk who won the election mostly because of his stand on immigration.

On Friday, the price of metals rose sharply after renewed interest from traders who saw a breakthrough in global trade. Copper, nickel, and zinc rose by 4%, 4.7%, and 2.1% in the London Metals Exchange. This increase was despite the fact that the dollar was strong during the week. The decision by China to halt trade talks with the US led the metals to fall during the Asian session today as shown below.

In the United States, the political deadlock concerning the confirmation of Judge Kavanaugh to the supreme court continued. This will be a major test for Donald Trump and Republicans as we head towards the mid-terms. After his confirmation hearings, Democrats leaked a report of sexual abuse brought forward by a California professor. She accused the judge of sexually abusing her when they were both in high school. This week, traders will follow closely her testimony to Congress. If Democrats win by blocking his nomination, it will be a major blow to Donald Trump and his agenda ahead of the midterms.