Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Denver news in your inbox
Catch up on the most important stories affecting your hometown with Axios Denver
Des Moines news in your inbox
Catch up on the most important stories affecting your hometown with Axios Des Moines
Minneapolis-St. Paul news in your inbox
Catch up on the most important stories affecting your hometown with Axios Twin Cities
Tampa Bay news in your inbox
Catch up on the most important stories affecting your hometown with Axios Tampa Bay
Charlotte news in your inbox
Catch up on the most important stories affecting your hometown with Axios Charlotte
Illustration: Rebecca Zisser/Axios
Apple's big reveal yesterday that China's economic slowdown will dampen revenues shows one reason why oil prices face headwinds despite OPEC's move to dial back production.
Why it matters: The tech giant's warning points to economic clouds that could also affect other sectors — including oil, which is already under pressure from rising U.S. supplies.
- "The slowdown in China and turmoil in stock and currency markets appears to be making investors nervous, including in oil markets," Reuters notes.
Where it stands: China is the world's largest oil importer, and this report comes on the heels of data showing a slowdown in manufacturing.
But, but, but: Prices are rising this morning after declining in the pre-dawn hours. WTI crude is trading at around $47.33 and Brent moved up to $56 as we sent this newsletter.
The big question: One thing to watch is whether the OPEC efforts can overcome worries about the global economy.
- “We really do need a sustained effort from some of the OPEC producers to take supply out of the market in order for prices to recover,” Jefferies analyst Jason Gammel tells Bloomberg. “Now we’re starting to see that."
Threat level: Another factor that could influence oil markets are signs that President Trump is picking up where he left off last year — pressuring OPEC to keep prices low, even though Saudi Arabia and other petro-states want higher returns.
- During yesterday's cabinet meeting, Trump claimed credit for the steep decline in prices since early October.
- “I called up certain people and I said, let that damn oil and gasoline, you let it flow — the oil,” Trump said (h/t to Vox’s Aaron Rupar and Bloomberg’s Javier Blas for flagging).
- Side note: Trump is still inaccurately conflating Brent and WTI prices, noting prices went from over $80 a few months ago to the mid-$40s now, but the former is Brent and the latter is WTI.
Be smart: A note from the Rapidan Energy Group flags Trump’s penchant for verbal and Twitter remarks toward OPEC as something to watch in oil markets, alongside the possibility that he could back “NOPEC” legislation to go after the cartel using U.S. antitrust laws. The note states:
Trump’s shift in policy and rhetoric, from preventing oil price spikes to pursuing low pump prices (which he views as an extra ‘tax cut’), constitutes an important and related development that will induce OPEC+ producers to accept lower prices than they would otherwise prefer — closer to $60 average Brent than $70 or higher.
What's next: The Energy Information Administration (EIA) will release its latest data on domestic oil stockpiles late Friday morning.
Go deeper: Other companies are feeling the heat in China's slowing market
Editor's note: This post has been updated to note that the release of EIA's data will take place Friday morning, not Thursday morning.