Malcolm Graham-Wood
Independent Analyst
There is nothing much that I can see in the oil market at the moment that would give the price much of an upward movement except perhaps further activity in the Middle East. With the greenback strong after the US inflation figures, the rig count easing and the speculators cutting long positions technically the market looks sated. Overall rigs were down 3 last week with a net fall of only 1 in oil with new rigs actually appearing in one or two places, I get the firm impression that 6o bucks for WTI is reasonably comfortable for a lot of domestic producers. As to those speculative positions the last two weeks have seen a retreat from the highs with last week showing a fall of 7.6% in WTI length and 13.4% in Brent.
Added to that were the comments made at the weekend by the Iranian Oil Minister Bijan Zangareh who stated that at the upcoming Opec meeting the cartel would ‘maintain production’. Whilst it is likely to maintain the status quo, there are still some stories doing the rounds that an across the board deal between Opec and non-Opec producers is being put together but dont hold your breath.
The only other possible reason for getting really optimistic at the moment are the reasonably positive signs of a global pick-up in the demand for products which has fed through to demand for crude thus offsetting any possible weakness in the market.
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