Crude oil prices popped near a five-month high this week as oil supplies are threatened worldwide.
The Organization of the Petroleum Exporting Countries (OPEC) is continuing to maintain a production cut that was implemented last year to intentionally raise prices, while a series of crises exacerbate the supply shortages.
Venezuela’s ongoing economic collapse, sanctions against Iran, and renewed military conflicts in Libya are reducing production from those nations, boosting global prices.
Meanwhile, U.S. oil production continues to rise, which is tempering prices domestically while allowing U.S. companies to benefit from high export prices. As of midday Friday, May West Texas Intermediate crude oil futures traded for $62.60 per barrel, well below the global benchmark Brent crude oil, which was worth nearly $70 per barrel.
Trade Deal on the Horizon?
A trade deal with China could be coming soon, according to President Trump and Chinese Chairman Xi Jinping after meeting in Washington.
The nine-month trade war has seemed to be near an end many times before, leaving traders skeptical, and both leaders admit that there are still difficult issues to tackle.
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However, both parties are increasingly in need of a resolution for political and economic reasons, as trade between the nations has suffered significantly.
Hog Wild Pork Markets
Pigs are flying this week as traders continue to worry about pig deaths in China as the African Swine Fever epidemic spreads.
China is home to more than half of the world’s hogs, and the Chinese consume nearly 60 million tons of pork each year. Facing a possible loss of a quarter of its hog production or more, the Chinese would have to import massive quantities of pork or change their diets substantially.
Hope for a trade deal with the United States could be a big relief for China, as their retaliatory tariffs of 62% on U.S. pork are making American meat exceptionally expensive for them. If a deal is struck and tariffs are lowered, Chinese purchases could overwhelm U.S. farmers, who produce only about 10 million tons of pork annually, with over a quarter of U.S. production already destined for exports.
These fears helped boost hog prices near contract highs on Friday, with June hog futures trading for 99 cents per pound.