Is oil going to $100?
U.S Crude inventories fell by WAY more than expected ( -6.3mm (-2.1mm expected) to their lowest since early December - and are well below their five-year average for this time of year as the summer driving season ends. Including the SPR (Strategic Petroleum Reserve), this is the lowest level of total crude inventories in America since 1985... Source: Bloomberg, www.zerohedge.com
While WTI oil hit $86, the rig count is still in plunge mode...
*A cumulative $4.9T of investments in global upstream oil and gas are needed by 2030 to meet market needs and prevent a supply shortfall" ---International Energy Forum (IEF) and S&P Global Commodity Insights. Source: Lawrence McDonald, Bloomberg
Trafigura says ‘fragile’ oil market may be prone to price spikes as higher interest rates and underinvestment squeeze the market according to a Bloomberg article
- The consensus view is for prices to remain near current levels, but the market is “more fragile than it looks,” Ben Luckock, the co-head of oil trading said in an interview at APPEC in Singapore. Brent crude is nearing $90 a barrel after OPEC+ heavyweights reduced supply — curbs that could continue further. - “One reason is underinvestment in new oil production,” he said on Monday. “Combined with higher interest rates, which make it more expensive to hold oil in storage, it means there isn’t much slack or flex in the system. Put all together, and you have a market that’s susceptible to price spikes.” - Oil options traders are showing confidence in the recent sustained surge in prices, bolstering wagers that crude will rally toward $100, even as questions remain over China’s outlook. However, Luckock and other attendees at the conference said it wasn’t all bad when it came to nation’s economy.
Crude Oil $100 calls over the next year have seen their open interest rise to 120,000 as of Thursday. $90 and $100 calls are also the 2 most held strikes over the next 12 months
Source: Barchart, Bloomberg
More or less in tandem: US 10y yields and WTI oil price
Source: Bloomberg, HolgerZ
Crude Oil cannot be stopped! It just had its 7th consecutive green week, its longest winning streak since February 2022
Source: Barchart
With the recent surge in oil demand, the US government is now left with a petroleum reserve sufficient for only 16 days
Source: Tavi Costa, Bloomberg
Crude Oil had its 6th consecutive green week, the longest weekly winning streak since February 2022
Source: Barchart
