-
Weak oil demand in China has been the main underlying problem.
-
Donald Trump has promised to end wars, something that benefits Bitcoin.
Oil has fallen drastically in recent weeks, losing 12% of its value, and approaching the lowest levels seen since May 2023, according to the financial newsletter ‘The Kobeissi Letter’.
Meanwhile, bitcoin (BTC) and other digital assets see strong growthreaching historical highs.
This unusual situation raises questions about the stability of the energy market and its implications for the global economic landscape, especially amid new political developments in the United States.
The Organization of Petroleum Exporting Countries (OPEC) contributed to this collapse by reducing its global crude oil demand forecasts.
This cut, announced on Tuesday, November 12, was the fourth in a row and applied to both 2024 and 2025, as OPEC aligns with the expectations of other industry players.
For 2025, the demand growth estimate was adjusted to 1.54 million barrels per day (bpd), reducing from an initial figure of 1.64 million bpd.
Change in trend and downward expectations
The analysts of ‘The Kobeissi Letter’ stand out that almost all rallies for oil have been sold with multiple key technical price channels. “Operating with this market has been very profitable,” but the trend clearly changed downwards around March 2024as seen in the following graph.
Oil price. Source: Source: The Kobeissi Letter.
Furthermore, there are major divisions regarding demand growth forecasts for 2024, mainly due to uncertain demand from China and the pace of the global transition towards cleaner energy sources.
“Weak oil demand in China, the world’s largest oil consumer, has been the main underlying problem,” says Kobeissi.
China’s crude oil imports In the first nine months of the year they decreased 3% year-on-yearmarking its fifth consecutive monthly decline and reinforcing concerns about the future of demand.
China’s oil imports. Source: The Kobeissi Letter.
The panorama changed after the elections in the United States
The geopolitical environment has also been transformed after the recent presidential elections in the United States.
Geopolitical risk premiums, which reflect the uncertainty and risks associated with events such as wars or sanctions, appear to be outside the current reach of the market, as investors anticipate the end of conflicts.
Markets are betting that “wars will end, so the chances of supply disruptions will be reduced.” However, Kobeissi warns that it seems that oil is the most worrying “about a possible recession in 2025.”
According to estimates by Kobeissi analysts, the chances of a recession occurring in 2025 are up to 70% approximately.
Traditionally, oil has been considered a safe asset in times of uncertainty, such as wars. Demand for oil often increases in these contexts, as it is needed for military transportation and post-conflict reconstruction.
However, Donald Trump’s election victory and his promise to reduce American involvement in international conflicts can reduce the risk of oil supply disruptions.
In his victory speech, Trump promised that “he would govern under a simple motto: promises made, promises kept. “We are going to keep our promises.”
Trump has criticized the billions of dollars spent by the United States supporting Ukraine during the war with Russia and has promised to end the conflict “within 24 hours” through a negotiated agreement.
Two days after winning the elections, he had a conversation with the Russian president, Vladimir Putin, and they discussed the war in Ukraine, assured the American newspaper ‘The Washington Post’.
This less interventionist foreign policy could also be applied in the Gaza conflict, where he has urged Israel to end its operationwhich could contribute to reducing tensions in energy markets.
Favorable scenario for bitcoin and cryptocurrencies
This context of peace promoted by Trump is presented as a possible positive catalyst for bitcoin, which has reached all-time highs in the last week.
BTC price. Source: TradingView.
Armed conflicts negatively affect bitcoin, as investors tend to withdraw from “risky” assets during situations of high volatility and opt for securities considered safe, which generates drops in the value of the asset.
In 2022, for example, the price of BTC fell by 10% after the start of the war between Russia and Ukraine, and in April of this year it briefly collapsed after a conflict in the Middle East between Israel and Iran.
However, a detente foreign policy stance could further spur the growth of bitcoin and other cryptocurrencies, facilitating the Cryptocurrency market to establish itself as a reliable haven.
Thus, the collapse of the oil price reveals not only the tensions within the energy market, but also the interconnection of political and economic factors at a global level.
The fall in crude oil and the rise of digital assets suggest a reconfiguration of the priorities of investors, who are beginning to look towards bitcoin in a context of declining value of traditional resources.
Crypto Keynote USA
For the Latest Crypto News, Follow ©KeynoteUSA on Twitter Or Google News.
