RBC Capital Markets’ Helima Croft blames the U.S.-China trade war for oil’s drop into bear market territory.
According to the firm’s global head of commodity research, bullish sentiment around crude has been damaged by global growth fears sparked by tensions between Washington and Beijing.
“What is the demand driver for oil? It’s China. There is a real fear of a slump in Chinese oil demand growth,” she told CNBC’s “Futures Now ” on Thursday. “One of the things that has kept this market tight this year has been really high Chinese oil imports.”
Without a sign that U.S. President Donald Trump and Chinese President Xi Jinping are closing in on a resolution, she contends the commodity will continue to struggle.
Croft, a CNBC contributor, contends Trump’s May 5 tweet that indicated a trade deal wasn’t close anymore stopped the oil rally cold.
“Oil was moving higher, you know, the first part of May, and then you had the trade war resume,” she added.
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