Weakness in the oil price persists, especially in Brent crude which fell yesterday and this morning has dropped below $104, traders yesterday saw it in the $104.40-105.40 range, but the support just isn’t there. There is no doubt that supply is trumping geopolitics at the moment and for those looking for a breakout, such as at IG where I talked last week, the downside has the upper hand. Market fundamentals are in the IEA monthly report out this morning, in July, Opec production was at a five month high of 30.44m b/d and Saudi Arabia was up at 10m b/d so even with high summer domestic demand it was filling those gaps. The Iraqi Oil Ministry announced that exports are unchanged and forecast August numbers to be at 2.5m b/d. Worse news was in the IEA demand numbers, particularly for next year as they followed the Opec research by calling them down despite still having positive GDP forecasts which is not a given.
Politically, Iraq is now supposedly in the process of changing Prime Ministers with al-Maliki being replaced by Haider al Abadi as the President’s (and the USA…) choice of leader. Abadi is meant to be a much safer pair of hands as he apparently appeals to a broader spectrum of citizens if that is possible but Maliki is not showing signs of going quietly.
Politically, Iraq is now supposedly in the process of changing Prime Ministers with al-Maliki being replaced by Haider al Abadi as the President’s (and the USA…) choice of leader. Abadi is meant to be a much safer pair of hands as he apparently appeals to a broader spectrum of citizens if that is possible but Maliki is not showing signs of going quietly.
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