Oil's Bohemian Rhapsody

Is this the real oil market life?
Is this just fantasy?
Caught in a landslide
No escape from reality.

Good gains marked on Wednesday
Then steep lows seen on Thursday
Open your eyes
Look up to the skies and see
That the global market remains oversupplied
But crude needs no sympathy
Because it easy comes, easy goes
A little high, little low
Anyway the wind blows
But sometimes a bit matters.

Traders, worries are taking control
Over the global economy slow
Asia, Europe, Brexit uncertainty blow.

The highest OPEC output just killed the mood
Pulled the trigger and now oil cartel limit is dead
The new monthly report will send shivers
With latest output figures
That will be thrown away
after another day.

Do not expect prices to rebound
To some major extent over the next month.

Prices aching all the time
Could be seen in lows at $35
But leave it all behind, as near-term range might be at $45-$50.

Nothing really matters
Anyway the wind blows.

Crude oil pressured by the strong US dollar

Crude oil prices are moving downwards after both benchmarks WTI and Brent reached the psychological level at $50.00 per barrel for first time since respectively October and November last year. The appreciation of "black gold" could be considered by the Fed as another sign for economy improvement in global aspect, that could support the eventual increase in interest rates in the US in June.  The appreciation itself would hardly be a determining factor in the decision of the central bankers, but that in turn would affect the levels of inflation in the country. Although it is not expected significant reduction of production levels, investors are awaiting the OPEC meeting on Thursday in Vienna, which outcome would impact on quotations of the crude oil.

Today oil prices still suffer from the stronger US dollar, though it was slightly supported by the beginning of the summer season in the US, which coincides with the US crude production decline to its lowest level since September 2014.

Today's trend is a continuation of the market situation from the end of last week. In the morning WTI slipped with 12 cents to trade at $49.21 and Brent fell with 21 cents to $49.11.

On Wednesday will be released the data by the American Petrolium Institute and on Thursday is due the official government data. And ahead of the OPEC meeting, this week will bring increased volatility on markets. 

CAD uplifted by rising oil prices

The loonie bounced gainst the US dollar today and marked a one-week high during today’s session, mostly supported by the rising oil prices.

USD/CAD moved down with 0.51% and currently is trading at 1.2843.

The unexpected decline of US weekly crude oil inventories warmly hugged the Canadian dollar. 

The report that was released today shows that reserves had fallen by 3.4 mln barrels in previous week. Surprisingly these figures trapped traders and this failure turned into advantage for oil prices.

WTI futures traded with 3% higher $46 per barrel. Brent jumped with  3.56% to trade at $47.14 per barrel, twisting earlier in the day around $45.20.

Oil

Oil prices rocked high to $44.50 and walked out the past week with almost $44. An announce of support turned to be the aching OPEC plan for a meeting in May. This factor is not the only glint that walks alone. Vital signs popped along with advantageous data from China, where imports in March shined with historical levels of 7.7 million barrels, or 21.6% more yoy. 

The Doha soundtrack is fading away even a bearish echo interfered the market participants.

A kind of versatility glowed up with some short-term rays brought by the big supply disruption in Kuwait and further declines in US production.

But clouds over the greenback usually tremble the oil market. Last week the US dollar crumbled down and investors reconsidered their track after pushing prices to 5-month highs.

Today the futures for WTI rolled down with 1.92%  to trade at $42.80, Brent slid with 1.02% to $44.65.

The picture can not come alive without fundamentals. On Tuesday and Wednesday latest US supply trends are due. This will be carefully followed by market participants as a small impulse may stir the markets.

The oil prices fell to extremely low levels with lost track of speed. This in fact turns to be an oversold tool and a momentary price increase is quite likely.

So until my words dry out, oil market suggests developing potential, that is not put in all of the papers.

Commodities

Gold lost momentum on Wednesday and slid 0.53 % to $1245.70, pressured by the strong greenback. US gold futures for April delivery traded at levels of $1253.20, having topped a high at $1.260 overnight after rebounding from the bottom at $1.230 before.

Meanwhile silver continued its strong performance, having managed to rise by 11% this month to over $17. Intraday high was registered at $17.40 and low at $16.93. Silver showed best performance with its highest level from May 2015 onwards.

Increases in equity markets twisted with rising oil prices provided strong support for metals. Copper rose 0.7% to $224.

The rally in oil prices continues after black gold managed to grow by over 7.5%, reaching a five-month high of $44. Brent crude rose to $45.80. Oil was boosted by the stockpiles data in the US for the week to April 15.

Diesel and dust

Doha soundtrack crackled with shifting sounds and broken plans.

The global oil producers failed to agree on cutting crude output.

The optimism disappeared when Tehran announced that will not accept these bans,

as Iran screamed to the world after years of economic isolation cut.

Shortly after the meeting in Doha oil prices fell with nearly 8% to $37.60.

Black gold started trading with a decline of $3, Brent even dropped to $40.85.

So the agreement on an output freeze deal into dreamland turns,

but frankly isn’t it a wicked game that the oil market burns

than if there was no meeting at all.  

Bullroars can not be heard in a knock-em-down storm.

Doha soundtrack

The eagerly awaited release is scheduled for 17th of April and it is going to introduce mixed tunes. 

The ongoing supply glut will keep the major beat of the discussion.

Oil prices are located close to the key psychological level at $40 a barrel. Currently the scepticism prevails mainly due to the friction between Saudi Arabia and Iran in terms of a reduction in yield that could ruin the materialization of a potential decision to restrict production in a real downturn.

The hopes of an agreement supported the recent rally, but the chances for such scenario remain weak, having in mind that Saudi Arabia is striving for solo performance.

If  markets fail to meet the desire for production cut, a setback from current levels might be expected.

Within this soundtrack I’m awaiting to here the roar of the bears, twisted with the louder sound of the solid long-term demand for oil.

Crude oil blessed

Over the past week crude oil snatched gains and the price rocketed to highest level in 2016, while the US dollar continued to depreciate against the basket of major currencies.

US light crude were seen at $38.50 per barrel, which is the fifth consecutive weekly gain. And this is based on the hopes that the major oil producers will achieve agreement on production freeze. The weakened dollar also supported the "black gold", which peaked at $40.54 per barrel. OPEC leader Saudi Arabia and other countries of the organization, along with Russia will meet in Qatar on April 17 to discuss the floating idea of production freeze. 

The positive mood on the potential agreement strongly supported oil prices, but cutting the output could not neutralize the glut. However, this is seen as a good start in trying to stabilize the oil market, which gives impulse to the crude oil. Brent was also inspired and reached its highest value since early December at $41.60 per  barrel. Oil prices recovered with over 50% as quotes fell to 12-year lows under $26 for WTI and $27 for Brent.

It was a picturesque rally. But if we witness just cutting output along with shadows over r the neutralization of the glut, the possibility of renewing the depreciation remains in place.

Oil prices back below $30

Oil prices dropped during the today’s session. WTI fell below the $27 level as the recent crude oil stockpile report revived fears about the huge supply glut. Futures for WTI plunged 4.30% to $26.27 per barrel, while Brent futures slided with 2.17% to $30.17 per barrel.

The Energy InformationAdministration (EIA) said on Wednesday that total crude stockpiles in the US slipped unexpectedly by 754,000 barrels over the week to February 5, compared to forecasts of a rise of about 3.13 million barrels.However, crude reserves at the Cushing, Oklahoma delivery hub increased to an all-time high of nearly 65 million barrels.The report also showed that gasoline inventories jumped by 1.26 million barrels over the measured week, much more than the rise of 243,000 barrels expected by analysts.Moreover, distillate stockpiles climbed by 1.28 million barrels, compared to afall of 1.58 million barrels expected by the market.On Wednesday, OPEC said in its latest monthly report it pumped 32.33 million barrels per day (bpd) of crude during January, up from the32.20 million bpd seen in December.The cartel expects world oil demand to grow by 1.25 million bpd to94.21 million bpd this year, only a small downward adjustment from the previous forecast. Non-OPEC oil supply is projected to decline by 0.70 million bpd to average 56.28 million bpd.The International Energy Agency(IEA) said earlier this week that oil prices may fall further this year as the global oil surplus is likely to worsen thanks to increased output from Iran. The country produced 2.99 million bpd in January, a rise of about 80,000bpd from prior levels.Iran's Oil Minister Bijan Zangeneh said his country is open to begin talks with other OPEC members as conditions in the oil market continue to decline.The EIA cut its price forecast for WTI to $37.59 per barrel for this year,compared to the $38.54 projected a month ago. The price for Brent should average $37.52 a barrel this year, down from the previously expected $40.15 a barrel.

Oil prices remain under pressure

Oil prices remained under pressure due to the weak demand, although small increases reported on Tuesday.

Persistent global production has contributed to the near-record levels of oil being pumped and a lessening of demand will hurt prices further.

Futures for WTI crude gained 0.19% to $36.88 per barrel. While Brent contracts advanced 0.11% to trade at $36.66.

While the fallout of increased production has resulted in lower prices, demand has so far kept up and even outstripped the supply.

However, that appears to be under threat as JBC Energy reports demand growth in Europe turned negative for the first time in ten months in October.

This represents a loss of 170,000 barrels per day (bpd) year-on-year while the report also highlighted the slowing demand from China as it continues to transition to the 'new normal'.

Some analysts are predicting that output will exceed demand by more than 2 million bpd, and with OPEC refusing to curb production the pressure is mounting.

As many as 64% of rigs in the US have closed this year, according to data from oilfield services company Baker Hughes, but a meaningful decline in output has yet to materialize, with the remaining producers being able to drill more efficiently.

The supply glut is unlikely to be alleviated anytime soon as Iran announced they will increase exports by 500,000 bpd within weeks of Western sanctions being lifted.

Iran has the fourth largest reserves of oil in the world and fears of a return to pre-sanction output of 2.5 million bpd could put further pressure on the fragile petroleum price.

Meanwhile, Monday's Saudi Arabian budget implied that the price war with US shale is taking its toll on the economy in the kingdom, with the government planning to spend 135 billion riyals less in 2016.

The ministry of finance was prompted to give such austere projections based on the persistent and stubbornly low oil prices. This has led them to giving reduced revenue expectations while also cutting spending.

Oil prices recovered in anticipation of stockpiles data in US

Oil prices recovered on Tuesday, as main oil benchmarks WTI and Brent traded in the green area in anticipation of serial data on US reserves.

US crude oil recovered on Tuesday from Monday's steep losses, with Brent trading near its lowest level since mid -2004 on a worsening supply glut.
Futures for WTI rose 0.28% to trade at $35.91 per barrel, while Brent futures dropped 0.33% to $36.23 per barrel.
The current global surplus of oil is the major threat for oil prices that had been falling since the summer last year, with some analysts predicting the commodity has not yet reached its bottom.Investment bank
Goldman Sachs sees oil at $20 per barrel next year, while some investors say the price may go even lower.
Oil production in the US is expected to fall from the current about 9.1 million barrels a day (bpd) to around 8.6 million bpd by mid-2016.
"While the oil market is expected to remain in surplus through 2016, the rate of stock builds is expected to slow, and there is enough onshore storage to contain it," analysts at Barclays stated.
The fresh weekly stockpiles data by the American Petroleum Institute will be released later on Tuesday,while the official government data are due to be published on Wednesday.
Last week, crude stockpiles in the US jumped by 4.801 million barrels to hit 491 million barrels, an almost record high, even as the market had forecast a fall of about 500,000 barrels. For the week ending December 18,analysts predict a rise of about 1 million barrels.