It is rather an interesting watch to see how oil is being somewhat left behind by the buying jamboree seen yesterday in other recognised investment suites.
Faced with a relief bounce after a torrid week of losses, the oil complex enjoyed a Friday that clawed back some of the worst excesses of the sell off, leaving the big ticket numbers of $80 in Brent and $75 in WTI intact.
The latest round of central banks meetings was deemed sanguine and encouraging. Interest rates in major economic hubs, the US, the UK, and the euro zone, were left untouched and some central banks, notably in emerging markets, the likes of Brazil and Poland, went as far as to cut the price of lending.
Ordinarily, the API data on Tuesday evenings is viewed as a signpost to the much more important and watched EIA/DOE inventory report that graces our screens on Wednesdays.
Some would argue that the geopolitical risk premium completely evaporated one month after the Hamas attack on Israel, others are convinced that it is still built in the price and without it the market would be significantly lower.
Every nuance and move by a central bank is bound to catch the attention of the market’s eye and this remains so with the decision by the Reserve Bank of Australia to hike its interest rate this morning by 25-basis points in the face of stubborn inflation.
It is a challenging undertaking to reconcile last week’s performance in the oil market. Financial assets rallied and they did so for a good reason.
After playing out the week buffeted by the enormous deluge of data that all markets have endured, oil prices find themselves in the throes of the recent phenomenon of finding bids into the weekend for fear of a more price sensitive occurrence emanating from Gaza/Israel.
As so many times in the recent past US oil investors took a distinctively different view from Europe yesterday.
It would appear as emotive as the current situation in Gaza/Israel is, cooler heads are prevailing and the idea of conflict spread is slowly turning into, and stealing from the alternative energy lobby, conflict capture.
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