Oil prices continued to fall this Saturday, November 9, against the backdrop of the trade war between the United States and China. And it is not the election of Donald Trump to the White House that will ease this trade war, with analysts predicting a deterioration in trade relations between the two countries as soon as the new president-elect takes office on January 20, 2025.
Indeed, the barrel of Brent, the reference for Algerian oil, was displayed at 73.87 dollars around 2:00 p.m., a decline of 2.33% compared to the opening this Saturday morning. Its American equivalent, the barrel of West Texas Intermediate (WTI) fell by 1.88%, to $70.38. Nearly $7 lost in the past month.
Quoted by AFP, John Evans of PVM recalls that “Chinese goods exported to the United States are worth between 400 and 500 billion dollars per year”. This makes the USA China's largest trading partner. This is not to please the new president-elect, Donald Trump, who threatened during his campaign to revisit this reality.
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Trump threatens Chinese economy
Indeed, Trump threatened to apply customs duties of 60% on Chinese products exported to the USA. This can be considered a big risk for the Chinese economy. For John Evans, “economists estimate that such strict measures would cost China 2 points of GDP”.
You should know, in this respect, that oil prices are closely linked to the Chinese economy, this country being the largest importer of oil in the world and the situation of its economy has direct consequences on oil prices. Especially since the Middle Kingdom is already laboriously emerging from the covid-19 crisis.
Also, according to the same source, China has been accumulating stimulus announcements in recent weeks, but “the market reaction shows that operators do not consider these measures as a means of stimulating consumption, but rather as a means of avoiding a financial crisis in China”, estimates an analyst at XTB.
The evolution of oil prices uncertain
That said, it is difficult to predict the evolution of oil prices with a future presidency of Trump who is a big fan of fossil fuels. The future president of the USA who will take office on January 20, 2025 will not fail to ensure that conditions are favorable for American producers, with the aim of promoting more abundant supply from the United States.
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This can only help the price of black gold to fall, but geopolitics are often unpredictable in the world. Because oil could be pushed higher by Trump's intentions to impose stricter sanctions against Iran and Venezuela, as well as by potential conflicts in the Middle East. Which explains the future uncertainty on the oil market.
