Showing posts from August 8, 2021

Voltatility in the oil markets still persists

  Crude oil price behaved like the movements of a ping-pong ball that hit a wooden floor, having fallen from a moderate height, during the past week – and the two weeks before it; there were endless peaks and troughs on the screens of traders and investors that result in nothing, when subjected to complex, state-of-the-art, modern data-crunching. To put it simply, without a reliable way to quantify the market sentiments and the related political developments, it is next to impossible to infer any conclusions from rapid fluctuations in price movements. The prices became fairly steady on Friday with WTI and Brent reaching $68.44 and $70.59 respectively. Throughout the week, the factors that usually determine the price of crude oil were well at play: the US crude stocks, an anticipated decline in demand in light of the spread of the Delta variant; tension in the Middle East involving Iran, to name but a few. On Wednesday, however, an additional factor came into play. The White Hou

Crude Oil Demand: optimism of the OPEC remains unchanged

Despite the presence of volatility in the crude oil markets, the OPEC is still optimistic about the demand of the commodity during the next few months of this year and for the entire next year. Although the emergence of the Delta variant of the Coronavirus has dealt a critical blow to the recovery of the global economies, the OPEC still hopes that the average demand of crude oil for this year is going to be around 96.6 million bpd; based on these estimates, the organization believes the same figure for the next year will exceed 100 million bpd. The OPEC must have taken into account the way the US, China and India have been affected by the new outbreaks of the pandemic: last week, there was a build-up of US crude inventories and according to the latest data from the EIA, US Energy Information Administration, there was a modest draw of the crude stocks for the week ending August 06 – just 0.446 million barrels; the crude imports by both China and India, meanwhile, have gone down sign

Oil price recovers slightly - very modest rate of rise

  The crude oil price that saw a precipitous fall on Monday recovered lost ground somewhat on Tuesday, perhaps owing to the modest inventory draw predicted by the API, American Petroleum Institute, for the week ending August 6. The API said there was a draw of 0.86 million barrels during the period it referred to. As of 10:00 GMT, both the rate of rise and the rise itself were fairly diffident; both WTI and Brent recorded less than 1% gain relative to what it was on Tuesday. Both analysts and investors are awaiting the next inventory forecast by the EIA, US Energy Information Administration, on Wednesday; last week the forecasts by the API and the EIA were different, though. The EIA, in its weekly figures, declared that there was a US crude inventory build-up for the period ending August 3 – 3.6 million barrels. The unexpected development left the crude oil markets tumbling, owing to the cumulative impact of the other uncertainties as well. The exponential rise in the spread

Oil Price and Selling Strategic Reserves: how strategic is the move?

  With the rise of crude oil prices in the past few months, some countries resorting to measures that some analysts thought unthinkable a few years ago; tapping into their respective Strategic Petroleum Reserves, SPR, is one of them. Both Japan and South Korea have been commercialising the SPR recently in order to mitigate the impact of the rising oil price; they are the third and fourth crude oil importers in Asia, after China and India. According to a report by Reuters in July, India has started doing the same, despite the estimated SPR of the latter being relatively low compared with its vast population of over 1.3 billion people. China has made similar moves too. Japan and South Korea took advantage of the rock-bottom crude oil prices last year and started building up their crude stockpiles in a rush before prices picked up in the last quarter of the year. China, the US and India made similar moves as well in that period. The concept of Strategic Petroleum Reserves came int

Oil Price: the need of the hour is a strong catalyst, not endless data crunching

  The price of crude oil fell on Monday and the factors that we thought behind it appear to be at play. In my column on Sunday, I raised the issue of the price of oil on Monday in the current circumstances. As of 11:00 GMT, WTI and Brent recorded steep fall of 4.14% and 3.96% respectively; the price of two commodities were at $65.47 and $67.93 respectively. The primary cause of the fall is, of course, the surging infections of the Delta variant of the Coronavirus across the globe regardless of the success of the vaccinations; relatively low number of deaths, however, shows that the vaccines do offer some form of defence while keeping the danger to lives at bay. The rising infections in the US are of particular concern for the crude oil markets; not only is it the largest consumer of the crude oil, but also is the largest producer in the world – the most important player in the market. The latest data from the EIA, US Energy Information Administration, clearly showed a build-

Oil Price on Monday: will it reflect the steadily rising tension in the Middle East?

  Analysts are keen on watching the developments in the crude oil markets on Monday, having witnessed a tumultuous week, where the investor sentiment oscillated between two forms of unpredictability that corresponded with a sharp fall in price, followed by a fragile recovery. On Tuesday, the API, American Petroleum Institute, predicted yet another US crude inventory draw, but by a modest amount – 869000 million barrels. On Wednesday, however, the EIA, Energy Information Administration, released its own figures that showed a crude inventory build-up of 3.6 million barrels. Not only did the last figure unsettle the markets, but also made the positive sentiments that had been hanging over the markets for months, reflected strongly by the upward trend of the oil price, just vanish in a matter of hours. When I subjected three articles from sites today, directly linked to crude oil markets, to a Machine Learning algorithm that measures the sentiment, what you see on the top of the articl

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