There were a variety of reasons yesterday to take a step back and decide to bank some profit. The retreat actually began on Tuesday evening, when the API reported builds in US oil stocks across the board.
Well, for one, oil investors either do not follow the US President on his social media platform, or they have serious doubts that Ukraine and Russia will cease hostilities against each other’s energy infrastructure. We are running out of adjectives to describe the performance of the CME Heating Oil contract, which gained the equivalent of $12.62/bbl yesterday, with ICE Gasoil rallying by the equivalent of $12.30/bbl.
Genuine hopes of the reopening of the Strait of Hormuz emerged in the middle of June. After all, there was an understanding between the US and Iran about the concessions the parties were willing to make in order to lay the groundwork for further and more substantial negotiations. As it turns out, the light was not the end of the tunnel, but an express train coming from the opposite direction, leading to a head-on collision with tangibly rising optimism.
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