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๐ข๏ธ Oil: check positions before the OPEC meetingโ
๐ Last week, hedge funds were actively selling futures and options for petroleum products - they are waiting for a surplus. The logic, at least, is strange, especially since, despite the sanctions, the export of oil and diesel fuel from Russia continues, including illegal ones, through Asian intermediaries.
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The supply of oil from Iraqi Kurdistan via the Kirkuk-Ceyhan oil pipeline has been suspended, the market is losing almost 450 million barrels per day. The problem arose back in 2014, and the arbitration decision of the International Chamber of Commerce on the illegality of such supplies was made back in mid-2022.
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Strikes continue in France, which led to the suspension of the work of some large refineries, in particular, the TotalEnergies (NYSE: TTE) refinery in Gonfreville-l'Orcher with a capacity of 240 thousand b/d. On Monday, the strike at the factory was extended for another three days, then for another week โ this creates a temporary but negative impact on the consumption of crude oil in the EU. In France, there are already problems with regular fuel at filling stations.
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A week ago, US Secretary of Energy Granholm said that there could be difficulties with replenishing oil reserves in the SPR, as the price level could turn out to be ยซuncomfortableยป. Last year, oil from the SPR was sold at $94, and it is planned to compensate for the reserves at $72 per barrel. But even if now the price confidently drops to the $70 zone, the US market is not ready for large purchases - the summer season is ahead.
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The sharp reduction in stocks in the US supports the overall positive sentiment of the market, but profit-taking before the OPEC meeting will actively put pressure on quotes. A new trend has not yet formed.
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Despite the volatility of futures, the balance on the physical market still demonstrates strong demand, so we do not advise those who are in purchases to turn around yet.
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Profits to yโall!