Bulls Stampeding
Bull Stampede is a painting by Manuel Sanchez
September 2023:? Bulls are stampeding because of perceived short supply
..Common sense which has been (..imho..) thrown to the perceived winds as crude has further rallied this week..? Even above the psychological barrier of $90..? As this Bull Train chugs seemingly inexorably on...
fxempires :? WTI Crude:? Natural Gas, WTI Oil, Brent Oil Forecasts – WTI Oil Breaks The Psychological $90.00 Barrier
For nearly a month+ ago all signs pointed to a foreseeable future depressed crude market as global economics affecting Demand weighed heavily on price as written to in IIR’s August Crude (& Products) Featured article..? But then geopolitical tensions
As I still question “..Where o’ where is Demand?..”? as what one thought would be that Demand – the Asian markets; namely China still has not surfaced..? And likely will not..
China's economy is stagnating. Reduced collaboration and increased political autocracy will continue to take a toll, China expert Huang Yasheng predicts. China's economy is stagnating, plagued by a real-estate crisis, high unemployment, dwindling confidence among investors, and other setbacks
And, one is witnessing sign of inflation increasing
Consumer prices registered their largest monthly increase since January, rising 3.7% in the 12-month period ending in August, despite the Federal Reserve’s aggressive interest rate hikes to curb inflation. Surging gas prices were the biggest driver of the uptick, but core inflation, which excludes the more fickle food and energy indexes, came in at its lowest level in nearly two years.
Not to mention the recent strength of the greenback..
The dollar was little changed on Friday, consolidating gains amassed during the week on better-than-expected U.S. economic data, even as the currency's underlying strong trend remained amid stable consumer and labor markets, which have kept the prospect of another rate increase on the table this year.
Despite Friday's pullback, the dollar index was headed for eight straight weeks of gains, the longest such streak since 2014.
Which is known – or had been as common sense is not so common anymore – to temper the price of oil; not to mention affect other Global economies..? Which in turn would affect Demand..? Wouldn’t it??
Marketplace:? U.S. dollar’s strength is mostly bad news for countries and companies around the world
But Mr. Oil Market and those who trade in it are going to ignore this “..lack of Demand..” for the time being and instead focus on the news which supports their “..shortfall & tightness..” case (..& positions..) which is what was reported by IEA..
As well as OPEC in their Monthly reports…
The Organization of the Petroleum Exporting Countries left its predictions for the global oil market largely unchanged Tuesday, continuing to forecast rising demand for oil, despite Saudi Arabia and Russia saying that they would be reducing supply until the end of the year.
The Vienna-based oil-production cartel said in its monthly report that it foresees oil demand in 2023 rising by 2.4 million barrels a day, with this figure dropping to 2.2 million barrels a day in 2024, both unchanged from July's report.
The group tweaked its 2023 supply forecast for non-OPEC members by 100,000 barrels a day to a rise of 1.6 million barrels a day, led by increases from the U.S, Brazil and Norway among others. However, it left the 2024 supply prediction unchanged from last month, forecasting a rise to 1.4 million barrels a day.
As a result, OPEC sees total demand averaging 104.31 million barrels a day for 2024 while it sees total supply from non-OPEC members at 74.28 million barrels a day, leaving a roughly 30 million barrel a day shortfall it would need to fill.
So a “..shortfall..” hhmmmm as we step out of this Northern Hemisphere – North America & Europe – Summer Driving season and step into the end of Q3 and start of Q4 where Demand is known to fall..? In fact we were already seeing such in the eia weekly #’s over the past month..? Until a rebound this past week..
Not to mention one knows that pundits are talking about Global Crude Inventory levels being low..??
Oil & Gas Journal : EIA foresees global oil inventory reduction for remainder of year
Following Saudi Arabia's Sept. 5 announcement to extend its voluntary 1 million b/d production cut to yearend, the US EIA foresees a reduction in global oil inventories over the period. The development is expected to exert upward pressure on oil prices.
But here in the US there was a surprise in store this week..
Oil prices edged lower on Wednesday, after earlier hitting a 10-month high, as a surprise build in U.S. crude inventories offset expectations of tight crude supply for the rest of the year.
One knows in the US & elsewhere in the Northern Hemisphere – that Q4 is what one dubs “..maintenance season..” because there is less expected Demand..??
And, Refineries will no longer have to run at 90%+ utilization rates:
U.S. crude oil refinery inputs averaged 16.8 million barrels per day during the week ending September 8, 2023, which was 177 thousand barrels per day more than the previous week’s average. Refineries operated at 93.7% of their operable capacity last week. Gasoline production decreased last week, averaging 9.2 million barrels per day. Distillate fuel production decreased last week, averaging 5.0 million barrels per day.?
Though there will be unplanned outages like what unfolded at Garyville
And Galveston Bay
Not to mention disasters unfolding throughout the world
So how will all of this seeming market craziness play out..? Will common sense return is anyone’s guess but nonetheless let IIR Energy’s Dedicated Market Research place the world at your fingertips.. Tomorrow's News Today.. ? Ask us! We have Answers!!
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Seer/Sage/Shepherd
1 年Market bulls "..see.." what they want to see **China's factory output, retail sales grew at a faster pace in August** and then "..ignore the rest.." like **tumbling investment in crisis-hit property sector.. ..As yes there are some positive signs out of China but it is not "..all things are rosy.." .. economy has recovered.. China is back to work as a "..hydrocarbon demand sink.." let's push price higher.. as Brent still has not yet broached the $95 psychological level though WTI broker through $90.. --- @Ellen Zhang?& Joe C. of Thomson Reuters report China's economy shows signs of stabilising but property slump threatens outlook China's factory output and retail sales grew at a faster pace in August, but tumbling investment in the crisis-hit property sector threatens to undercut a flurry of support steps that are showing signs of stabilising parts of the wobbly economy. Chinese policymakers face a daunting task in trying to revive growth after a brief post-COVID bounce in the wake of persistent weakness in the crucial property industry, a faltering currency and weak global demand for its manufactured goods.
Seer/Sage/Shepherd
1 年OilPrice.com Intel:? OPEC Reiterates Bullish 2024 Outlook. OPEC reiterated its bullish view for 2024 oil demand, seeing it rise by 2.25 million b/d citing a swifter economic recovery in major economies despite high interest rates and elevated inflation, with global GDP growth forecast to come in at 2.6% next year.
Seer/Sage/Shepherd
1 年Bloomberg reports that Mohamed El-Erian?is warning that a swath of corporations will be hurt by higher interest rates when they have to refinance next year. “If you look at high yield, if you look at commercial real estate, there’s massive refinancing needs next year. Massive,” he said Friday. El-Erian, chief economic adviser at Allianz and a?Bloomberg Opinion?columnist, warns that?there are “things that have to be refinanced in this economy that cannot be refinanced?in an orderly fashion?at these rates.” His warning may?underscore why the stakes are so high for understanding how much longer the US Federal Reserve will keep interest rates at elevated levels. And El-Erian isn’t the only one warning that the US economy is just beginning to feel the effects of the central bank’s aggressive monetary policy tightening. Apollo Global Management, Inc.’s?Torsten Slok?said the impact of rate hikes is beginning to?ripple?through credit markets, with delinquency rates on credit cards rising.?— David E. Rovella
Seer/Sage/Shepherd
1 年..Ain't nothing yet slowing down this Stampeding Bull Train as Gelber & Associates write earlier this day that WTI Crude Surges to $91.15 Amid Production Concerns and Positive Macroeconomic Signals; China Bolsters Liquidity with Second RRR Cut WTI is wrapping up a remarkable week of gains, with futures prices touching $91.15 earlier this morning, levels last observed in November 2022. This uptrend in crude prices is largely influenced by supply side worries stemming from recent production cuts. Furthermore, the market has been boosted by positive macroeconomic indicators, such as the Federal Reserve's nuanced attention to core inflation and the ensuing anticipation of stable interest rates. However, it's worth noting that WTI is technically considered overbought at these levels. In parallel, China's central bank, the People's Bank of China, has opted for the second reserve requirement ratio cut this year, aiming to prompt liquidity and further its economic recovery. This move is particularly significant, given China's stature as the world's second-largest oil consumer, and the nature of its recovery continues to cast doubt over potential oil demand.