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Although prices were down 6% today to below $58 per barrel, upside geopolitical risks have been dominating the oil market for a while now.
Crude though is down more than 8% from the monthly highs registered last week.
Farther out, the 2020 IMO sulfur rule could push prices to above $90 per barrel, while an all out U.S.-China trade war could drop them to $50 or below.
As we move into the more immediate summer months, Bulls are banking on higher demand as the travel season enters full swing
U.S. oil consumption, for instance, peaks in July and August.
Our oil use last summer was the highest it's been since 2006.
Even more telling, summer prices last year were actually pretty high, ~$68 for WTI in July and August.
For reference, summer oil prices were in the mid-$40s and low-$50s in 2015, 2016, and 2017.
And we should expect another record demand level this summer.
Now that prices have fallen below $60, and with a surging economy, remain bullish on U.S. oil usage this summer.
In fact, the U.S. is now at what's considered "full employment."
But still, as compared to the shoulder months of April and May, demand only rises 4-6% in the summer.
And even globally, the market for oil demand is stuck in a Catch-22: a trade deal would appear to be bullish for prices, but higher prices also help lower economic growth and thus oil demand in the critical developing economies.
China and India, for instance, expensively import 75% and 85% of the oil that they use, respectively.
