Oil ended the week with a thud, closing 4.6% lower after China threatened to fight back “at any cost” against new U.S. proposals for an additional $100 billion in trade tariffs. These new tariffs come on top of $50 billion worth of tariffs announced by the Trump administration last month. This week’s losses mean oil is now up just 2.7% for the year after having been up nearly 9.5% in January. Oil was not the only market to take the hit on Friday. The major U.S. equity indices all ended down more than 2% on rising trade tensions.

Market Awaits Reports From Oil Watchdogs

This week, the market awaits several reports from energy market watchdogs and participants. On Tuesday, we get the U.S. EIA’s Short-Term Energy Outlook (STEO), followed by OPEC’s Monthly Oil Report on Thursday and the IEA’s Oil Market Report on Friday. Market participants will be combing through these reports to find evidence that the global oil supply rebalancing story remains intact.

First up is the EIA’s STEO for March. The market will pay attention to adjustments or revisions to U.S. crude oil production estimates. In last month’s report, the EIA projected that U.S. crude oil production will average 10.7 million barrels per day in 2018, which will be the highest annual average U.S. crude oil production level ever. This level is higher than the previous record of 9.6 million barrels per day set in 1970. The EIA also forecasts that 2019 crude oil production will average 11.3 million barrels per day. Changes to these estimates could have an impact on the market’s supply expectations. U.S. shale oil has been flowing freely, with rising supplies weighing down oil prices.

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