The push-and-pull of Middle East tensions and slowing global growth is leaving prices for the oil in flux. Declining business sentiment is also feeding into the slowing global growth narrative, but how does all the news affect oil prices in the future?

Oil prices tumbled more than 20 percent since the end of April due to fears of global demand as fears of slower growth worldwide are taking hold of the commodity. It didn’t help that the U.S.-China trade deal that was supposed to happen went sideways, but oil traders and investors are still hoping that oil prices will still end up higher.

“The (oil) market is in a rut and desperately in need of some robust economic data to get it out of this funk,” said Stephen Innes, managing partner at Vanguard Markets in Bangkok.

Geopolitical oil supply disruptions could continue to feed into higher oil prices, which will benefit bullish bettors. Attacks on two oil tanker ships off the coast of Iran sent oil prices upward as finger pointing between the United States and Iran ensued.

U.S. intelligence was quick to identify Iran as the culprit of the attacks. According to video evidence, Iran’s Revolutionary Guard was shown removing an unexploded from one of the two oil tankers that were attacked.

Is the recent slide in oil prices just temporary weakness and a buy-the-dip opportunity for traders? Bullish betters can consider the United States 3x Oil (NYSEArca: USOU), ProShares UltraPro 3x Crude Oil ETF (NYSEArca: OILU) and the Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 3X Shares (NYSEArca: GUSH).

Supply cuts by the Organization of Petroleum Exporting Countries (OPEC) have pushed oil prices down, but downward forces from trade wars have also kept them in check. Oil prices rocketed higher last month following U.S. President Donald Trump ending waivers on companies wishing to purchase Iranian oil without facing stiff sanctions. The companies affected most by these waivers were China, Greece, India, Italy, Japan, South Korea, Taiwan and Turkey.

Oil, however, faces a number of possible headwinds, but thus far, it’s been ignoring these risks.

“Oil & Gas bears may point to concerns stemming from the potential for a global recession, as Europe grapples with a slowdown and continues to deal with the uncertainties of Brexit,” a Direxion post noted. “During the Global Financial Crisis, the oil demand fell of the table in a relatively short period. Don’t forget that trade negotiations between the US and China still loom. If discussions break down, oil demand could drop not just because of less physical trade, but also because of possible broader negative impact on the global economy. Also, because oil is priced in US dollars, if the greenback continues to rise, it could put negative pressure on prices.”

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