Is the Oil Market About to Implode! The Donald Strikes Again!

A Murmuration of Uncertainty

Ah yes the oil market. A complex ecosystem teeming with life... or rather teeming with volatility. Today we observe a rather dramatic plunge a veritable waterfall of red ink cascading across the trading screens. The culprit? None other than the shall we say *unpredictable* actions of President Trump. You see he's decided to slap some rather hefty tariffs on China and the market much like a startled flock of starlings has taken flight in a rather disorganized fashion.

The Great Trade Tango

For a brief moment it seemed the sun was shining. A temporary reprieve! A 90 day pause on higher rates for most countries! The markets rejoiced briefly. But then like a particularly grumpy Komodo dragon President Trump turned his attention to China slapping on tariffs that made even the most seasoned traders gulp. As Jim Burkhard of S & P Global Commodity Insights wisely notes these negotiations are less a carefully orchestrated symphony and more of a… well a chaotic cacophony.

China's Crude Conundrum

China you see is not just any player in this game. It's the world's second largest economy and crucially the biggest crude importer. So when tariffs go up demand like a shy chameleon tends to retreat into the shadows. The price of U.S. crude once a majestic lion has fallen $2.66 or 4.27% to $56.69 per barrel. Its global cousin Brent is also feeling the pinch down $2.64 or 4.03% to $62.84 per barrel. Quite the drama wouldn't you say?

A Volatile Vortex

The West Texas Intermediate a particularly feisty specimen of oil swung wildly a dizzying 13% from the session low. It's enough to make one’s head spin! As I always say “It seems to me that the natural world is the greatest source of excitement; the greatest source of visual beauty; the greatest source of intellectual interest. It is the greatest source of so much in life that makes life worth living.” But I must confess sometimes the financial markets give it a run for its money.

Can America Tame the Beast?

The question now of course is whether the United States can successfully negotiate with as Mr. Burkhard puts it “70 countries all at once?” It's a Herculean task akin to herding cats or perhaps in this case corralling a herd of particularly rambunctious wildebeest. “I don't think the chaos is over,” Burkhard aptly observes. Indeed it would seem the drama is far from over. One might even say the plot thickens!

A Call for Calm (and Caution)

So what does all this mean for the average viewer? Well brace yourselves. The oil market like a restless ocean is prone to sudden storms. Whether this is merely a squall or a full blown tempest remains to be seen. But one thing is certain: we must observe with patience with curiosity and perhaps with a healthy dose of skepticism. After all as I've often said “Cherish the natural world because you’re a part of it and you depend on it.” Perhaps we should also cherish a stable economy because well we depend on that too!