Oil prices swing amid Trump assassination attempt

July 15, 2024 (MLN): Oil swung on Monday as an assassination attempt on Republican presidential contender Donald Trump brought political risk into focus.

Brent crude rose to $85.16 per barrel after falling 2.5% last week

While West Texas Intermediate crude (WTI) was at $82.4 per barrel.

The attack on the former president injected a fresh dose of uncertainty into the US election race, as Bloomberg reported.

The dollar moved modestly higher, making commodities including oil that are priced off the currency more expensive for most buyers.

Oil remains solidly higher for the year, helped by OPEC+’s output curbs and stronger fuel demand over the Northern Hemisphere summer.

The Chinese Communist Party’s Third Plenum this week, which will set the nation’s broad economic and political priorities, will be closely watched for clues on the growth trajectory in the world’s largest crude importer.

China’s appetite for crude oil to soybeans has shrunk over the first six months of the year, raising concerns over demand.

The nation’s GDP growth fell to the worst pace in five quarters. The International Energy Agency said China’s slowdown would likely weigh on global oil consumption growth.

“It’s not surprising following the attempted assassination of former President Donald Trump over the weekend that we are seeing a stronger US dollar, and that strength is weighing on oil,” said Warren Patterson, head of commodities strategy for ING Groep NV. “In addition, the market is also coming around to the idea that Chinese oil demand could very well disappoint this year.”

Even so, timespreads signal robust near-term demand, as the gap between Brent’s two nearest contracts stayed in a bullish, backwardated structure, with the nearest contract at a premium over the later-dated one.

At 97 cents a barrel, it’s about double what it was a month ago.

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