Crude oil is in full hesitation. Multiple events colliding, putting traders in a difficult situation. In June US inventories fell to a 2-year low and supply risks from both Venezuela and Iran boosted prices. But the trend is reversing. An OPEC report confirms further decline in demand for 2019, down 20’000 barrels per day. Then the Paris-based International Energy Agency said the exact opposite, predicting higher demand in 2019, suggesting that oil inventory should continue to shorten.
Background has not fundamentally changed. US sanctions against Iran are planned for 1 November, while there seems to be an improvement in US-China relations: US Treasury Secretary Steven Mnuchin confirmed invitation of senior Chinese officials to Washington. Worries of US supply strengthen as Hurricane Florence could disrupt inventories on the US East Coast. Meanwhile, Tropical Storm Gordon interrupted about 9% of the Gulf of Mexico oil production for at least two days. Recent data confirm a continued decline in inventories, down 5.3 million barrels.
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