By Srinivas Chowdary Sunkara // petrobazaar // 10-5-18
Markets are adjusting to looming sanctions
Traders are adjusting and assessing the scenarios for sanctions against Iran. Markets reacted very strongly to U.S fresh sanctions news on Iran and crude prices were clocked up yesterday to the fresh highs since Nov, 2014.
I surprised, why market reacted so aggressively since it was not a shocking news and was already priced in for last couple of days. I felt that the Asian markets are more worried about the crude supplies which should not be, As Americans are ready to open taps since they pushed up crude production by 20% since Trump took over. The deal news took focus away from U.S weekly stock reports which showed significant drop in crude, gasoline and distillates during the last week, extended support to bulls.
Crude oil price update
On Wednesday, U.S crude futures for June delivery gained above 3pct to close at $71.14 a barrel on Nymex while Brent July futures advanced 3.15pct to close at $77.21 per barrel on London based ICE futures Europe exchange. Today, Asian markets continued gains at the time of reporting.
EIA report - summary:
During the last week, Crude oil and gasoline stocks were dropped by 2.2Mb each with 0.3 and 0.9 percentage drop respectively. Distillates were shrank by 3.8Mb during the week. U.S production was ramped up by 84Kbpd while both imports and exports were down. Crude oil inputs into refinery were down by 75Kbpd and operating percentage of utilisation was reduced by 0.7%. The only bullish news is that stocks at Cushing are pumped in high during the week.
Bearish stock reports and strong demand growth are the supporting factors apart from U.S - Iran deal issue. Market is looking at EU stand on the deal. Dollar is trading at high and other metals are gaining support. Banks are estimating Brent at $90 near future. All these factors igniting the oil prices towards up.
Disclaimer: Views and opinions expressed here are for information purposes only and not an offer or a solicitation to sell or buy any physical commodities or financial instruments. The views and analysis are based on reliable public information available at the time of writing. This report and its content cannot be copied, redistributed or reproduced in part or whole without the prior written permission of petrobazaar.com