Malcolm Graham-Wood
Independent Analyst
Still under pressure the oil price fell again yesterday for a number of reasons but mainly due to the strength of the dollar. As I said in an interview with IGTV yesterday, if you are a bull of the dollar you almost have to be a bear of oil and that seems to be what the currency experts are telling us.
Other influences on the oil price remain the same as we head towards a June which will be busier than usual. Saudi sources yesterday said that output ‘won’t be cut’ at the June 5th meeting and the French are considering using their veto in the Iran talks unless ‘full access’ is given to nuclear sites, a red line the Iranians are not prepared to cross.
Also and after the close, the API inventory stats came out and as usual Wall Street’s finest got it wrong, again. Predicting another stock draw, this time of around 2m barrels, the number turned out to be 1.3m but a build which helped no one. There was a draw in gasoline of 3.6m barrels and refineries are flat out filling product demand earning juicy margins into the bargain, one for the notebook for the 2nd quarter figures for majors and refiners.
So, the short/medium term outlook for oil is hampered by stocks and a likely strong greenback but in my IGTV interview I assess the much more bullish longer term scenario.
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