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Showing posts from July 25, 2021

WTI Oil Price against EIA Crude Inventories: why my machine learning algorithm failed to find the ultimate formula?

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  The crude oil price, which took a dramatic fluctuation last week, finally got the ultimate market stabilizer – the fall of the US crude oil inventories. It boosted the volatile markets with much needed impetus for some sort of stability. The draw of over 4 million barrels for the week ending July, 23, did the trick; the oil price started going green again on investors’ screens. That, however, has not been the case always – at least recently; the fall of US oil inventories did not bring about the desired effect on the crude oil markets, especially when the hopes of reviving the JCPOA, 2015 Iranian nuclear deal, sea-sawed wildly in the past few months. Against this backdrop, I was tempted this week to check the feasibility of coming up with a model to predict the weekly WTI crude price against the US inventory stocks. I used JavaScript programming to write just 160 lines of code in order to make a Machine Learning algorithm.     You can get real data – the weekly oil price an

Oil Price: US inventory draw lifts the market mood up

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  The unsettled crude oil markets seem to have got a mood booster, having been through some chaotic market speculations - at last. With the release of the latest US inventory data by the EIA, US Energy Information Administration, the markets found some hope and the price of crude oil got back into the ‘green’ realm. The EIA disclosed that the US crude oil inventories dropped by 4.1 million barrels during the week ending July 23; the predicted draw for the same period by the API, American Petroleum Institute, was 4.728 million barrels. It was substantial, given the rising Coronavirus infections in the US. Its emotional impact on the crude oil markets was crucial and reaction was understandable.   The price has been rising, but at a slower rate, perhaps, due to the anxiety of the investors about the rising uncertainties in the Middle East. The looming departure of the US troops from Iraq and the prospect of new actors in the region filling in the vacuum thus created are causing

The withdrawl of American troops from Iraq and its direct impact on the crude oil markets

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The recent meeting between Mustafa al Kadhimi, the Iraqi prime minister and President Jo Biden at the White House came at a critical time for Iraq, in particular and the region, in general. In more than one way, the beleaguered Iraqi prime minister is stuck between a rock and a hard place at present: on one military front, the ISIS resurgence is real and alarming; on a diametrically opposite front, Iran backed militia groups are flexing their muscles; the grievances of ordinary Iraqis, meanwhile, grow exponentially even with daily survival at stake. Against this backdrop, the Iraqi government, time and again, demanded the departure of all foreign troops – most likely the Americans. That’s what exactly the US is going to do by the end of the year. Iraqis – and their prime minister – however, know very well that in the absence of foreign troops, Iraq will not descend into a military vacuum; on the contrary, it will be a haven for foreign elements without the legitimate zeal. The

Oil Price in 2021: evolving Middle Eastern politics still weighs heavily on it!

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  Global crude oil markets, which saw a highly tumultuous days during the week, finally reached an uneasy equilibrium by the weekend, with the price of WTI and Brent reaching $72.07 and $74.10 respectively. Exactly a week before to date, Prince Abdulaziz bin Salman, the Saudi energy minister, supported by the mediation of Russia, managed to reach a deal to overcome an impasse over a baseline,   with the UAE. While refusing to divulge the details, Prince Abdulaziz, the half-brother of Saudi Crown Prince, Mohamad bin Salman, said that consensus building was an art, referring to the success of repairing a major rift in the OPEC+; not only did it show the influence wielded by the Saudis in the OPEC+, but also their tendency to exercise flexibility when the need arose. Just after the deal, the Crown Prince of Saudi Arabia and his counterpart of the UAE met in Riyadh, the Saudi capital, perhaps, in order to iron out a catalogue of other burning issues that sprang up in the aftermath of

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