Daily Oil Fundamentals

Oil quietly steady, Central Banks have the ball

19 Jul 2023

Oil quietly steady, Central Banks have the ball

It does seem rather poignant that the biggest headline of the week in oil was in fact false and withdrawn. This refers to the ‘flash’ informing us that Saudi Arabia would extend its voluntary cut through December 2024. Nevermind, one might imagine our collective agreeing, at least the US oil reports will give us much to chew over. Those of us expecting some fireworks from the overnight API oil stock report are sorely disappointed as it lands with a bit of a whisper rather than a bang.

Daily Oil Fundamentals

China remains antidote to bulls

17 Jul 2023

China remains antidote to bulls

After improving $3.47/barrel in WTI and $3.28 in Brent to make new highs on Thursday from start of play on Monday, the market is in the process of eroding such hard fought gains and both crudes now sit only some 50c/barrel higher than from the outset of last week. After the US CPI was well received by bulls, aided with protest-inspired closures in Libya and testing towards the vital technical area of the 200-day moving average for both WTI and Brent, a correction ensued and continues today.

Daily Oil Fundamentals

Perceived tightening and actual outage

14 Jul 2023

Perceived tightening and actual outage

It is difficult to remove ourselves from the inflation and interest rate stories as they continue to haunt investment markets in the background be they for better or worse. The very tepid US PPI of -0.1% has again given rise to speculation of both disinflation and that the Federal Reserve will only raise interest rates by one more time this year. Indeed, the CME FEDwatch tool has adjusted pricing to the extent that there is only a 20% chance of another riseafter the expected 25-basis point increase at the July 25-26 meeting. Where this is important for risk assets including oil, is it has inspired a complete flounder by the US Dollar.