Although the pros are hopeful that week-end developments give stocks a boost, oil bulls may be sadly disappointed.
One of the anticipated week-end developments is a slew of economic indicators from China. And it’s true that the Street believes weak data signals more rate cuts – but for energy traders what matters more is that weak data is another sign China is slowing.
We have to reconcile that “China may no longer be the straw the stirs the drink for the oil markets,” says top energy trader Addison Armstrong on Fast Money’s Halftime Report.
And in the face of a European slowdown and three months of lousy jobs numbers here in the US, “where will the demand come from,” he asks.
Armstrong reminds that the other major bullish catalyst for risk-on is the hope of a bailout for Spain. “But what does a recapitalization of Spain’s banks mean for European growth, I don’t think it means a lot.”
Armstrong also doesn’t even see OPEC attempting to boost oil prices in a meaningful way. “The Saudi’s aren’t going to help Iran (by driving oil higher.) For them a weak Iran is a good thing."
“The fundamentals just don’t play for strong oil. We need to see growth that brings back energy demand before oil can rally,” he says.