Crude markets solely have a really slender path in the direction of larger costs. Within the imminent time period, CTA promoting exercise will weigh on value motion into the OPEC assembly. This promoting exercise is more likely to be much less important than that which we count on in gold markets, however ought to weigh on costs nonetheless, TDS’ Senior Commodity Strategist Daniel Ghali notes.
Crude costs susceptible regardless of sturdy demand as provide returns
“In the end, crude markets will battle to soak up further barrels from OPEC+ over the approaching months, which we argue displays a strategic pivot in coverage pushed by an try to a) take a look at US shale manufacturing; b) enhance compliance; and most significantly c) regain the supply-side leverage required to fight decrease Oil costs within the occasion of a slowdown in demand.”
“Vitality demand stays resilient, US shale manufacturing is peaking, Venezuelan export licenses have expired, and geopolitical dangers surrounding Iran stay elevated – all of which is able to doubtless act as a shock absorber to decrease costs.”
“Nonetheless, OPEC+ was finally pressured into this strategic pivot, and stays emboldened to deliver these barrels again throughout seasonally favorable months; markets will battle to soak up these barrels, significantly following the summer season months. The trail to sustainably larger costs stays extraordinarily slender.”
