Seems like the bulls are back ...

For now, fears of tight oil supply around the world overshadows potential economic growth slowdown, and oil prices are heading back upwards this morning.

Pointing to continued elevated demand for oil is among others the easing of covid-19 restrictions in China as well as the current summer driving and travelling season. Potentially limiting demand is the possible central banks increasing interest rates in an attempt to curb the raging inflation. The supply situation remains quite fragile as the restrictions on Russian oil limits the volumes somewhat as well as very fluctuating output from Libya. OPEC+ earlier this month agreed to increase output; but some uncertainty remains if the group will be able to “walk the talk”.

Allegedly, the U.S. is investigating the option of capping the price of Russian oil. According to Treasury Secretary Janet Yellen, it is an attempt to limit the revenues from the oil exports. Likely, this will be among the topics that the G7 countries will discuss when they meet next week.

?Among the top purchasers of Russian oil, which has been banned in among others the U.S., is China. In May, China imported 55% more Russian oil compared to a year ago, corresponding to almost 2 mio. barrels per day, up from 1.59 mio. barrels per day in April.

?All in all, still lots of volatility in the market seems to exist.

This market briefing is based solely on publicly available sources and we cannot guarantee or take responsibility for data accuracy. Neither shall the content form basis of recommendations to purchase or sell financial hedging products, but is solely for information purposes.