Oil: A One-Two Punch

Oil has borne the brunt of the year-to-date deterioration in cyclically sensitive financial assets. It is a key underperformer both within the commodity space and among global risk assets. This underperformance underscores that in addition to the trade war-induced headwind to demand, bearish supply-side developments are also weighing down on crude prices. As we discuss in this report, these dynamics will likely continue exerting downside pressure on oil prices over the coming weeks and months.