Crude oil outlook turns bearish on US-Iran relief, surplus fears

Oil complex saw a dramatic selloff as the threat of conflict loomed over the heart of global oil last week, but the usual panic buying by traders and consumers was met quickly by a wave of US shale drillers grasping the opportunity to lock-in prices for future production. The whole rally looked blunted, and when the dust settled, the plunge was sharp. The whole scenario showed how powerful the shale revolution has changed the psychology for crude markets.

Markets will get some boost as the US and China will sign an official trade deal and Phase two talks can begin. In reality, market consensus states that this deal two can happen only after November 2020, as Donald Trump expects the reelection of his government to happen. A major glitch remains as the US sanctions put pressure on Iran and China, which is Iran’s top crude oil and condensate importer.