Chinese refiners are busy trying to refine heating fuels as winter in Asia proves to be brutal this year. The demand for fuel is driving up prices and there are reports of some shortages.
Saudi Arabia is already sensing an opening, cutting production to raise prices without any fear of an angry tweet and feeling free to manipulate prices higher.
Being an oil bull is not as lonely as it was a few months ago as the bullish fundamentals are becoming clear even to the most die-hard bears. Despite skepticism that OPEC+ could keep it together and reduce global supply, there’s now no doubt they can.
While the markets reacted to the storming of the Capitol with a quick drop and a spike in the VIX Index, the resilience of the market suggested that, despite the unrest, there is unwavering confidence in the United States.
While the surprisingly bearish American Petroleum Institute report, along with Georgia and the U.S., are still hanging in the balance, they’re keeping prices on oil flip-flopping near the $50 per barrel area.
We’re getting strong overall commodity sentiment as funds look to get long and rebalance. It appears that OPEC+ is recognizing the reality of more Covid-19 lockdowns and that perhaps it isn’t the time to be raising production just yet.
The happy mood could even support oil, which, though still in an uptrend, has been reluctant to breakout higher as Covid-19 demand destruction concerns continue to cause worry.
Oil prices are slipping as a new strain of Covid-19 overshadows a relief package that Congress finally passed, along with rising concerns that Russia is getting trigger-happy on increasing oil output.
The UK is putting in lockdown orders, which is overshadowing the good news we heard out of Washington regarding the avoidance of shutting down the government and a Covid-19 relief package.
The recent crude oil moves seemed to foreshadow what the Fed said yesterday about the U.S. economy and jobs market. The economic outlook and jobs are improving, leading to higher energy prices.