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☆ Saudi Arabia may make surprise oil cuts, sending prices soaring and the futures market into backwardation, says a 30-year energy expert
▼ + stars: | 2023-11-23 | by ( Laila Maidan | ) www.businessinsider.com time to read: +3 min

Oil prices fell on Thursday after OPEC delayed its meeting from November 26 to November 30. AdvertisementAs the US Thanksgiving holiday puts the stock market at a standstill, oil prices are still on the move. There are three levels at which production can be pulled back: through OPEC+, an extension of the existing voluntary cuts, and new voluntary cuts. But, what he anticipates could happen is an announcement about additional voluntary cuts from Saudi Arabia. If Saudi Arabia does implement additional cuts, then this will flip the futures curve into backwardation, he noted.

Persons: It's, Anas Alhajji, —, Alhajji Organizations: Service, West Texas, Outlook Advisors Locations: OPEC, Saudi Arabia, Nigeria, Angola, Dubai, backwardation, contango

☆ Brent crude futures climb over 2% to gain $2
▼ + stars: | 2023-11-20 | by ( Erwin Seba | ) www.reuters.com time to read: +3 min

Brent crude futures were up $2.00 to $82.61 a barrel by 9:39 a.m. CDT (1539 GMT). Oil prices have dropped by almost 20% since late September while prompt inter-month spreads for Brent and WTI slipped into contango last week. "If additional cuts are agreed, a short-term price boost is expected, but its longer-term price impact seems dubious as enforcement and adherence will be the salient issue." Investors are also keeping an eye on Russian crude oil trade after Washington imposed sanctions on three ships that have sent Sokol crude to India. The number of oil and gas rigs operated by U.S. companies rose last week, the first gain in three weeks, energy services business Baker Hughes said on Friday.

Persons: Leonhard Foeger, WTI, Tamas Varga, Sokol, Baker Hughes, Erwin Seba, Paul Carsten, Florence Tan, Emily Chow, David Goodman, Ed Osmond Organizations: REUTERS, Brent, . West Texas, Reuters, of, Petroleum, Moscow, IIR Energy, Thomson Locations: Vienna, Austria, HOUSTON, Russia, Brent, Washington, India, U.S, East, Gaza, Houston

Oil prices have dropped by almost 20% since late September while prompt inter-month spreads for Brent and WTI slipped into contango last week. "In light of last week's obliteration of oil bulls, some kind of response was forthcoming from the (OPEC) producer group," said Tamas Varga of oil broker PVM. Investors are also keeping an eye on Russian crude oil trade after Washington imposed sanctions on three ships that have sent Sokol crude to India. U.S. energy companies last week added oil and gas rigs for the first time in three weeks, energy services business Baker Hughes said on Friday. The oil and gas rig count serves as an early indicator of future output.

Persons: Leonhard Foeger, Brent, WTI, Tamas Varga, Sokol, Baker Hughes, Paul Carsten, Florence Tan, Emily Chow, David Goodman Organizations: REUTERS, . West Texas, Reuters, of, Petroleum, Moscow, IIR Energy, Thomson Locations: Vienna, Austria, Israel, Russia, Brent, Washington, India, U.S, East, Gaza, London

☆ Oil extends gains on expectations of further OPEC+ supply cuts
▼ + stars: | 2023-11-20 | by ( Emily Chow | ) www.reuters.com time to read: +3 min

SummaryCompanies Brent, WTI prices rise nearly 1%OPEC+ set to consider whether to make more supply cuts -sourcesUS adds oil, gas rigs, first time in three weeks -Baker HughesSINGAPORE, Nov 20 (Reuters) - Oil futures edged higher on Monday, extending gains on expectations of OPEC+ deepening supply cuts to shore up prices, which have fallen for four weeks on easing concern of Middle East supply disruption amid the Israel-Hamas conflict. Both contracts settled 4% higher on Friday after three OPEC+ sources told Reuters that the producer group, made up of the Organization of the Petroleum Exporting Countries and their allies including Russia, is set to consider whether to make additional oil supply cuts when it meets on Nov. 26. Oil prices have dropped by almost 20% since late September while prompt inter-month spreads for Brent and WTI slipped into contango last week. In a contango market, prompt prices are lower than those in future months, signalling sufficient supply. Investors are also eyeing disruption in Russian crude oil trade after Washington imposed sanctions on three ships that have sent Sokol crude to India.

Persons: Brent, Baker Hughes, WTI, OPEC's, Jorge Leon, Leon, Tony Sycamore, Biden, Sycamore, Sokol, Florence Tan, Emily Chow, Christopher Cushing Organizations: West Texas, Reuters, Organization of, Petroleum, Rystad Energy, Monetary, . Strategic Petroleum Reserve, Thomson Locations: Baker Hughes SINGAPORE, East, Israel, Russia, Brent, Saudi Arabia, Saudi, OPEC, Washington, India, Moscow, U.S, Gaza

☆ Oil extends gains as OPEC+ to mull deeper cuts
▼ + stars: | 2023-11-20 | by ( ) www.cnbc.com time to read: +2 min

An oil pump jack is seen in the Loco Hills region, New Mexico, U.S., April 6, 2023. Oil futures nudged higher on Monday, extending gains on expectations of OPEC+ deepening supply cuts to shore up prices, which have fallen for four weeks on easing concern of Mid-East supply disruption brought about by the Israel-Hamas conflict. Brent crude futures climbed 11 cents, or 0.1%, to $80.72 a barrel by 0012 GMT while U.S. West Texas Intermediate crude was at $75.97 a barrel, up 8 cents. Oil prices have dropped by almost 20% since late September while prompt inter-month spreads for Brent and WTI slipped into contango last week. Investors are also eyeing disruption in Russian crude oil trade after Washington imposed sanctions on three ships that have sent Sokol crude to India.

Persons: Brent, WTI, Goldman Sachs, Tony Sycamore, Biden, Sokol Organizations: West Texas, Reuters, Organization of, Petroleum, . Strategic Petroleum Reserve Locations: New Mexico, U.S, Israel, Russia, Brent, Saudi Arabia, OPEC, Washington, India, Moscow, East, Gaza

Word "Oil" and stock graph are seen through magnifier displayed in this illustration taken September 4, 2022. The front month's discount to the second month traded at minus 15 cents on Wednesday, the widest discount since July. U.S. crude stocks rose by 3.6 million barrels last week to 421.9 million barrels, according to the U.S. Energy Information Administration (EIA), far exceeding analysts' expectations in a Reuters poll for a 1.8 million-barrel rise. U.S. crude production held steady at a record 13.2 million barrels per day (bpd). Meanwhile in Asia, China's oil refinery throughput eased in October from the previous month's highs as industrial fuel demand weakened and refining margins narrowed.

Persons: magnifier, Dado Ruvic, Brent, Stephanie Kelly, Jacqueline Wong Organizations: REUTERS, . West Texas, U.S . Energy Information Administration, Thomson Locations: China, United States, Asia, U.S

☆ Oil tumbles nearly 6% to four-month lows
▼ + stars: | 2023-11-16 | by ( Matt Egan | ) edition.cnn.com time to read: +1 min

US oil prices tumbled almost 6% to a low of $72.16 a barrel — the lowest level since July 7. The selloff continues a sharp reversal from earlier this fall when oil prices threatened to hit $100 a barrel. The latest plunge in oil prices could help drive gasoline prices even lower for Thanksgiving. Analysts blamed the oil market selling on growing concerns about oversupply and weakening demand, including in China. The oil market is now in what’s known as contango, meaning prices are higher for the future than they are now.

Persons: ”, Robert Yawger, Yawger, Patrick De Haan Organizations: New, New York CNN, AAA, Analysts, Mizuho Securities Locations: New York, China, Israel

[1/2] The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. U.S. crude stocks rose by 3.6 million barrels last week to 421.9 million barrels, according to the U.S. Energy Information Administration (EIA), far exceeding analysts' expectations in a Reuters poll for a 1.8 million-barrel rise. Diesel inventories fell more than expected at 1.4 million barrels. The International Energy Agency on Tuesday joined OPEC in raising oil demand growth forecasts for this year, despite projections of slower economic growth in many major countries. European Union diplomats said Russian oil tankers are not targeted in the European Commission's proposal for tightening implementation of a price cap on the country's crude oil.

Persons: Angus Mordant, Brent, John Kilduff, Arathy Somasekhar, Paul Carsten, Sudarshan Varadhan, Laura Sanicola, Marguerita Choy, David Gregorio Our Organizations: REUTERS, HOUSTON, . West Texas, U.S . Energy Information Administration, Organization of, Petroleum, International Energy Agency, Tuesday, Financial Times, Thomson Locations: Loving County , Texas, U.S, contango, Asia, New York, Saudi Arabia, Russia, OPEC, Denmark, Houston, London

REUTERS/Kacper Pempel/File Photo Acquire Licensing RightsLONDON, Nov 7 (Reuters) - Europe's record gas inventories continue to climb even higher as a warm start to autumn delays the onset of heating demand while high prices discourage industrial use and encourage continued imports. But prices for gas delivered at the height of winter in January 2024 have started to slide as the record levels of inventory weigh on the market. Chartbook: Europe gas inventories and pricesInventories across the European Union and United Kingdom hit a record 1,146 terawatt-hours (TWh) on Nov. 5, according to Gas Infrastructure Europe. At the same time, futures prices and calendar spreads have remained strong, despite record stocks, discouraging resumption of industrial use and encouraging continued imports of liquefied natural gas (LNG). Related columns:- Europe’s gas stocks at record high going into winter 2023/24 (October 6, 2023)- Europe’s gas storage must peak early this autumn (September 8, 2023)John Kemp is a Reuters market analyst.

Persons: Kacper, Stocks, John Kemp, David Evans Organizations: REUTERS, European Union, United, Gas Infrastructure, Thomson, Reuters Locations: Strachocina, Poland, Chartbook, Europe, United Kingdom, Gas Infrastructure Europe, Frankfurt, Germany, Ukraine

☆ US natgas prices drop 7% on record output, mild weather
▼ + stars: | 2023-11-06 | by ( ) www.reuters.com time to read: +3 min

Front-month gas futures for December delivery on the New York Mercantile Exchange fell 25.1 cents, or 7.1%, to settle at $3.264 per million British thermal units (mmBtu), their lowest close since Oct. 27. One bearish factor that has weighed on the futures market for most of this year has been lower spot or next-day prices at the Henry Hub benchmark in Louisiana. The spot market has traded below front-month futures for 176 out of 212 trading days so far this year, according to data from financial firm LSEG. That premium could encourage some speculators to leave gas in storage for longer in hopes of higher prices later in the winter. With seasonally colder weather coming, LSEG forecast U.S. gas demand in the Lower 48 states, including exports, would jump from 101.5 bcfd this week to 109.2 bcfd next week.

Persons: El, Gelber, LSEG, Scott DiSavino, Bernadette Baum, Josie Kao Organizations: El Nino, Associates, U.S . Energy Information Administration, New York Mercantile Exchange, Henry, Thomson Locations: Louisiana, contango, U.S

REUTERS/Claro Cortes/File Photo Acquire Licensing RightsLONDON, Oct 30 (Reuters) - China's imports of tin concentrates collapsed in September, reflecting the suspension of mining activity in the semi-autonomous Wa state in neighbouring Myanmar. China's imports of tin concentrates from Myanmar and other sourcesIMPORT SLUMPChina imported 7,300 metric tons of tin concentrates in September, which was the lowest monthly count since February 2019. Imports from Myanmar slumped to just 1,421 metric tons after a mini surge over July and August ahead of the mining ban. The Myanmar ban has to date had little impact on either China's production of refined tin or the tin price. The boom in tin usage for home electronics during lockdown in 2020-2021 has given way to a prolonged downturn.

Persons: Claro, that's, Jan Harvey Organizations: REUTERS, United Wa State Army, Democratic, London Metal Exchange, International Tin Association, Reuters, Thomson Locations: Shanghai, Claro Cortes, Wa, Myanmar, China, Tanintharyi, Democratic Republic of Congo, Bolivia, Brazil, Russia

Zinc's relative under-performance is down to a build-up of excess metal as the global market shifts from supply shortfall to widening surplus. It now thinks zinc supply will exceed usage by a hefty 248,000 tonnes with the surplus growing to 367,000 in 2024. Zinc market balance forecasts by the ILZSGSHIFT TO SURPLUSThe zinc market's shift to surplus after two years of supply deficit is down to weaker-than-expected demand and higher-than-expected production. European demand is expected to contract by 1.8% this year due to slowing activity in the construction sector, which accounts for around half of zinc demand in the form of galvanised steel. LME zinc price, stocks and cash-3s spreadNOW YOU SEE IT...

Persons: LME, Barbara Lewis Organizations: Reuters, REUTERS, OZ Minerals, London Metal Exchange, Citi, Thomson Locations: Lawn Hill, Queensland, Europe, China, New Orleans, United States, Singapore, Malaysia's Port Klang

REUTERS/Florence Lo/Illustration/File photo Acquire Licensing RightsLONDON, Sept 27 (Reuters) - China's appetite for base metal imports appears to be growing. FROM RUSSIA WITH LOVEChina's imports of primary aluminium surged to a near two-year high of 153,000 metric tons in August, bringing the year-to-date count to 755,000 metric tons. SLOW COPPER BOAT TO SHANGHAIRefined copper imports were 340,000 metric tons in August, the highest monthly tally this year. The country's refined zinc trade has reverted to net imports this year but volumes remain modest by historical standards. SHIFTING THE NICKEL MIXThere has been no pick-up in China's imports of refined nickel.

Persons: Florence Lo, they've, They've, China's, David Holmes Organizations: REUTERS, Shanghai Futures Exchange, London Metal Exchange, LOVE, Malaysian, New, Democratic, China's CMOC, Reuters, Thomson Locations: China, contango, Shanghai, RUSSIA, U.S, New Zealand, SHANGHAI, Democratic Republic of Congo, DRC, Indonesia

REUTERS/Beawiharta Acquire Licensing RightsLONDON, Sept 20 (Reuters) - London Metal Exchange (LME) stocks of tin have grown steadily over the summer months and have reached levels last seen in April 2020. Around half of the tin produced every year is used as a soldering material on circuit boards, linking usage to the fortunes of the consumer electronics sector. Global semiconductor sales from SIABOOM AND BUSTTin's fortunes are closely tied to the consumer electronics sector, which has experienced a remarkable boom-and-bust cycle over the last three years. That translated into a boom year for tin demand, usage growing by 7.6%, led by a 12.2% rise in the soldering sector, according to the International Tin Association. However, global semiconductor sales have registered small month-on-month increases since April and the year-on-year gap narrowed to 11.8% in July, according to the SIA.

Persons: Lockdowns, Boom, Barbara Lewis Organizations: PT Timah, REUTERS, London Metal Exchange, Shanghai Futures Exchange, SIA, Semiconductor, Semiconductor Industry Association, International Tin Association, World Semiconductor Trade Statistics, Wa State, Reuters, Thomson Locations: Mentok, Indonesian, Bangka, Myanmar, London, Shanghai, Wa, China

LME copper stocks and Cash-3s time-spreadSUMMER SURGEAlmost 100,000 metric tons of copper have been warranted in the LME warehouse network since the middle of July, lifting headline stocks to 149,600 metric tons. European inflows have been split between Rotterdam (19,325 metric tons) and the German port of Hamburg (9,850). The CME's delivery locations, however, don't include Mobile, Alabama, where LME copper stocks have grown to 1,925 metric tons. The amount of cancelled stock awaiting physical load-out from the LME warehouse system currently stands at a minimal 225 metric tons. LME, LME shadow, CME, ShFE and INE copper stocksCHINA OFFSETThe copper stocks surge has to date been largely confined to the LME delivery system.

Persons: Emelia Sithole Organizations: London Metal Exchange, Mobile, CME, Shanghai Futures Exchange, International Energy Exchange, Shanghai, Reuters, Thomson Locations: Europe, United States, China, Rotterdam, Hamburg, Asia, Kaohsiung, Busan, New Orleans, Mobile , Alabama, London, ShFE, CHINA

A pressure gauge and valves are seen at Storengy's natural gas storage site in Saint-Illiers-la-Ville, western France, September 20, 2022. Inventories across the European Union and the United Kingdom had climbed to 1,071 terawatt hours (TWh) by Sep. 6, according to Gas Infrastructure Europe (“Aggregated gas storage inventory”, GIE, Sep. 8). The risk of storage space running out has been reduced correspondingly. Nonetheless, it will be critically important for the refill season to end earlier than usual to ensure storage space does not run out. Related columns:- Europe's record gas inventories cap prices (Aug. 8, 2023)- Europe’s gas storage is filling too fast (July 6, 2023)- Europe’s gas prices stabilise as storage additions slow (June 8, 2023)- Europe only has space for a small gas refill in 2023 (April 14, 2023)John Kemp is a Reuters market analyst.

Persons: Christian Hartmann, John Kemp, Marguerita Choy Organizations: REUTERS, European Union, Gas Infrastructure, Thomson, Reuters Locations: Saint, Ville, France, United Kingdom, GIE, Europe, Russia, Ukraine, Australia

Pipelines run to Enbridge Inc.'s crude oil storage tanks at their tank farm in Cushing, Oklahoma. Cushing crude inventories have declined in five of the most recent six weeks by a total of 9 million barrels (-24%) since July 14. The drawdown in U.S. crude inventories has coincided with additional production cuts by Saudi Arabia and Russia totalling around 75 million barrels during July and August. U.S. NET CRUDE IMPORTSU.S. net crude oil imports remain subdued despite the depletion of inventories with exports continuing to run at a relatively fast rate while imports stay low. Related columns:- Oil market to tighten modestly in late 2023 (August 17, 2023)- Crude oil and fuels draw funds as sentiment shifts (August 7, 2023)- U.S. oil and gas production begins to flatten (August 4, 2023)- Saudi output cut removes downside risk from oil market (July 12, 2023)John Kemp is a Reuters market analyst.

Persons: Nick Oxford, CUSHING, Cushing, Biden, John Kemp, David Evans Organizations: Enbridge Inc, REUTERS, U.S . Energy Information Administration, refiners, Traders, NET, U.S . Department of Energy, Strategic Petroleum Reserve, Thomson, Reuters Locations: Cushing , Oklahoma, Chartbook, Cushing, Oklahoma, U.S, Saudi Arabia, Russia, United States, Asia, Europe, Asia . U.S, Ukraine, Saudi

☆ Column: South Korea's Gwangyang is the new LME aluminium battleground
▼ + stars: | 2023-08-29 | by ( Andy Home | Thomson Reuters | Senior Metals Columnist Who Previously Covered Industrial Metals Markets For Metals Week | ) www.reuters.com time to read: +6 min

LONDON, Aug 29 (Reuters) - The South Korean port of Gwangyang has emerged as the new hub for storing London Metal Exchange (LME) aluminium. Another 54,000 metric tons of aluminium have arrived in the intervening week, promising more turns of the storage carousel. LME aluminium stocks at Gwangyang and Port KlangGWANGYANG GRABS THE SPOTLIGHTA total 198,125 metric tons of aluminium were warranted at LME warehouses in Gwangyang in the first quarter of this year, most of it arriving in four single-day clips. Gwangyang LME aluminium stocks, arrivals and drawdownsRUSSIAN METAL NOW DOMINATESThe competition to store LME aluminium during periods of weak demand is not new. The Gwangyang aluminium storage wars may just be starting.

Persons: Gwangyang, ISTIM, Henry Bath, Sharon Singleton Organizations: London Metal Exchange, Glencore, ISTIM, Pac Global Services, Reuters, Thomson Locations: Gwangyang, Malaysia's Port Klang, Port, Rotterdam, Busan, South Korea, Port Klang, Malaysian, Detroit, Vlissingen, ISTIM

☆ August is living up to its reputation as a lousy market month, but no one's panicking
▼ + stars: | 2023-08-21 | by ( Bob Pisani | ) www.cnbc.com time to read: +4 min

As we enter its final two weeks, August is living up to its reputation as a lousy month. With a decline of 4.8%, this is the worst month so far for the S & P 500 since December 2022. As we entered August, the S & P 500 was approaching a valuation of 20 times forward earnings. We've spent a lot of time talking about the high multiple (P/E ratio) for the S & P 500. The ERP is usually calculated using a short-hand method: S & P 500 earnings yield (the inverse of the P/E ratio) minus the 10-year Treasury yield.

Persons: Friday's, We've, Lowry, we're, Jerome Powell Organizations: Technology, Treasury

LME three-month zinc hit a near three-year low of $2,215 per metric ton in May. LME zinc price stocks and spreadsSQUEEZE DRAWS OUT HIDDEN METALThe trigger for the current spate of arrivals in the LME warehouse system appears to have been a sharp contraction in short-dated time-spreads earlier this month. If so, the game is on in Singapore, which has accounted for all the recent arrivals bar 1,000 metric tons at Malaysia's Port Klang. A total 31,500 metric tons of zinc were warranted in the city in July along with 5,125 metric tons of lead and 625 metric tons of tin. In the interim, there is plenty of potential for more metal to head towards LME storage sheds.

Persons: Ilya Naymushin, Kirsten Donovan Organizations: REUTERS, London Metal Exchange, Citibank, Low, Study, Reuters, Thomson Locations: Angara, Novoangars, Russia, Singapore, Malaysia's Port Klang ., East Asia, China, Europe, Ireland

Futures prices for ultra-low sulphur diesel delivered in New York Harbor in September climbed to $135 per barrel on Aug. 9, up from $95 on May 31. Prices for diesel and other distillate fuel oils have been rising much faster than for crude petroleum, widening margins for refiners. Diesel prices are rising as traders anticipate that shortages will quickly re-emerge if the economy avoids falling into a recession later in 2023. The rapid escalation in diesel prices and hedge fund position building is a warning that capacity constraints and upward pressure on goods prices are likely to re-emerge relatively quickly later in 2023 and in 2024. Depleted diesel inventories are a sign that if the economy achieves a mid-cycle soft-landing the second phase of the current expansion could prove short and inflationary.

Persons: Guan, John Kemp, David Evans Organizations: Kinder, Phillips, Los, Los Angeles Refinery, REUTERS, U.S . Energy Information Administration, ICE Futures, U.S . Commodity Futures Trading Commission, U.S, diesel, Diesel, Thomson, Reuters Locations: Los Angeles, Carson , California, U.S, United, New York Harbor, Europe, Singapore

Norwegian producer Norsk Hydro (NHY.OL) has called for the exchange to reconsider its decision last November to continue accepting deliveries of Russian metal. China imported 462,000 metric tons of Russian-brand primary aluminium last year, up from 291,000 metric tons in 2021. The country has emerged as the market of first resort for Russian metal since the invasion of Ukraine in February 2022. The top two destinations for June's "exports" were Japan (10,000 metric tons) and South Korea (20,500 metric tons). China's aluminium run-rate fell by an annualised 636,000 metric tons over the first quarter, according to the International Aluminium Institute.

Persons: Rusal, Goldman Sachs, ingot, isn't, Jane Merriman Organizations: London Metal Exchange, Norsk Hydro, Hydro, Rusal, International Aluminium Institute, AZ Global, Reuters, Thomson Locations: Norwegian, Russian, China, United States, Europe, Asia, Ukraine, Japan, South Korea, Gwangyang, CHINA, Yunnan

JPMorgan's chief global markets strategist, Marko Kolanovic, advises investors to play commodities against recession risks. Kolanovic named natural gas as his top pick within the commodities sector. Investors can look to the United States Natural Gas Fund LP (UNG) to gain exposure to the commodity; it's down about 48% year to date. The strategist forecasts U.S. natural gas prices to undergo a 25% rally in the next few months on expectations of a supply growth reversal. Backwardation is what happens when the spot price is higher than the price of the approaching futures' contracts.

Persons: Marko Kolanovic, Kolanovic, — CNBC's Michael Bloom Organizations: United States Natural Gas Fund, DB Agriculture Fund, Brent Oil Fund Locations: U.S

How much more will arrive in the market of last resort depends on China, which is stepping up imports of refined zinc. China's refined zinc imports, exports and net tradeCHINA FLIPS BACK TO NET IMPORTERChina imported 45,329 metric tons of refined zinc in June, the highest monthly tally since May 2021. The country exported 81,000 metric tons of zinc in 2022, including shipments of 7,800 metric tons to Mexico and 3,400 metric tons to the United States, two destinations that haven't in the past featured in China's zinc trade. The country's monthly refined zinc production has been notching double-digit growth rates since March. So far, however, there is scant evidence of a significant build of surplus metal in the mainland market.

Persons: It's, Paul Simao Organizations: London Metal Exchange, China, Shanghai Futures Exchange, Shanghai Metal, International, Study, Reuters, Thomson Locations: Singapore, Asian, contango, China, CHINA, Mexico, United States, backwardation, Shanghai, Europe, Antwerp

From a fundamental perspective, the production cuts announced by Saudi Arabia and Russia are expected to remove excess barrels from the market. Since most fund positions are concentrated in nearby months, where liquidity and volatility are greatest, the wave of buying has accelerated the return to a backwardation structure. The exceptionally low level of hedge fund positions in crude means there is plenty of scope for position-building to anticipate, accelerate and amplify the move. Related columns:- Oil investors less bearish after Saudi output cut extended (July 10, 2023)- Is oil market’s glass half full or half empty? (June 29, 2023)- Frustrated oil bulls made to wait for price recovery (June 22, 2023)- Saudi Arabia’s 'lollipop' has yet to sweeten oil prices (June 6, 2023)John Kemp is a Reuters market analyst.

Persons: Brent, WTI, John Kemp, Paul Simao Organizations: Thomson, Reuters Locations: Saudi Arabia, Russia, backwardation, North America, Europe, China, Brent, Saudi

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