Whatever good standing Donald Trump had in the eyes of India’s Prime Minister, Narendra Modi, it has disappeared in a puff of tariff smoke. India was already smarting from the imposition of a twenty-five percent tariff last week, but with the threat of the levy doubling in three-weeks’ time if Delhi did not refrain from its oil trade with Russia, the outrage is almost seismic.
These days, there is rarely a single reason behind a reversal in market sentiment. Over the past week, a combination of economic data, newly announced import duties, and spontaneous policy decisions, including attacks on independent institutions, have taken their toll on market confidence. Not even the stand-alone tech sector was immune to the anxiety permeating financial markets. The already imposed punitive measures are likely to be followed by others, such as excise duties on pharmaceutical companies and semiconductors, not to mention China.
After the onslaught of data and news last week, yesterday’s considerations seemed sedate by comparison. The trading day was not without heft though, particularly for our market. The return of the 547kbpd balance of OPEC’s 2.2mbpd oil production cuts was not unexpected, but it sat heavy in a market where the out-of-season strength in Distillate has diminished and where the Gasoline market is not turning out to be the summer bastion of support. In the EIA inventory report last week, four-week implied demand average registered at under 9mb.
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