The Brent/WTI differential you may have noticed, is swinging around a lot at the moment, yesterday it was down to Brent rallying and WTI weaker ahead of the expiry today. Brent actually looked technically very dodgy during the day, traders are watching the $101.40 support very carefully and at one stage it touched $101.07 but bounced off it and at the moment we are at last nights close levels. WTI looks a little better after the API inventory stats showed a draw of 1.4m barrels, slightly higher than forecasts.
Underlying of course things do remain bearish as I have been suggesting for some time as Iraq pushed up production a bit as did Libya and unconfirmed reports of a forecast of the US producing 12m b/d domestically by 2019 swirled around the market. Opec don’t appear too concerned about the price weakness, mainly as the Saudis are pumping flat to the boards in case of an Iraq cessation, they can cut back soon enough if it gets bad but don’t forget as we reach the end of the summer demand will pick up and the slack will be taken up. No, the person who is most worried about the oil price fall is more than likely to be Mr Putin as a protracted fall in oil revenues will hit Russia very hard.
Finally its all eyes on the US for the next few days, tonight sees the release of the FOMC minutes, followed by the Jackson Hole meeting and Janet Yellen’s statement on Friday…
Underlying of course things do remain bearish as I have been suggesting for some time as Iraq pushed up production a bit as did Libya and unconfirmed reports of a forecast of the US producing 12m b/d domestically by 2019 swirled around the market. Opec don’t appear too concerned about the price weakness, mainly as the Saudis are pumping flat to the boards in case of an Iraq cessation, they can cut back soon enough if it gets bad but don’t forget as we reach the end of the summer demand will pick up and the slack will be taken up. No, the person who is most worried about the oil price fall is more than likely to be Mr Putin as a protracted fall in oil revenues will hit Russia very hard.
Finally its all eyes on the US for the next few days, tonight sees the release of the FOMC minutes, followed by the Jackson Hole meeting and Janet Yellen’s statement on Friday…
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