The US brokered accord between Russia and Ukraine agreeing to a ceasefire on each other’s energy complexes and a truce to hostilities in the Black Sea might be viewed as progress from Washington but with language already being manipulated (by Russia in the main) hours after the announcement, one can only cast doubt on whether this is a turning point.
Ignoring the laws of economics comes with a substantial price tag. Tariffs are ultimately paid by the consumer as so neatly illustrated by the latest stock market slump. So, now that the next clockwork-like policy reversal arrived, this time in the form of a ‘targeted approach’ when applying reciprocal tariffs from April 2, of course, equities rallied. The brighter investor’s mood was also aided by the rise of composite PMIs on both sides of the Atlantic.
In Friday’s note, we concluded that the demand side of the oil equation is rather straightforward. The rudimentary view foresees further possible demand destruction due to the seemingly perennial trade wars across the globe, but investors will only adjust their default pessimistic view if deteriorating data warrants it. The supply side has considerably more tentacles.
Copyright © 2025 TP ICAP