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Commodities

Oil prices stay firm, buoyed by OPEC+ supply cuts

Brent crude is on track to post weekly gains for the eighth week after touching a 13-month high at the first trading session of the week.

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OPEC+ Alliance, US, Russia, Canada, Mexico reach historic deal to cut 13.4 million bpd, Oil market still uncertain over the OPEC+ deal as prices react positively, 7 oil producing countries most affected by covid-19, see where Nigeria is placed

Brent crude prices stayed a bit firm at the last trading session of the week as they hovered near $70 a barrel as production cuts by OPEC+ constrained supply. Optimism about a recovery in energy demand for the better half of this year gave Oil bulls enough support in staying near the $70 a barrel price level.

In addition, oil traders are buoyed by the decision of OPEC+, in the past few weeks to largely curbing oil production in April.

The British-based oil contract, Brent crude is on track to post weekly gains for the eighth week after touching a 13-month high at the first trading session of the week following attacks on Saudi Arabian oil facilities.

READ: Oil prices post highest level in 13 months amid rising Middle East strain

At press time, Brent crude futures dropped by 0.2%, to $69.52 a barrel while U.S. West Texas Intermediate crude for April traded at $65.83 a barrel, plunging by 0.3%.

Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics further broke down the oil macros keeping oil prices at such price levels;

“After a few days of consolidation post-OPEC+, there has been a strong rebound in oil prices driven by gasoline and refined products signaling that economic recovery moves in full swing.

“Oil prices roar to the sound of ringing gas pump counters as according to the US Department of Transportation, more and more folks take the highways ahead of what is likely to be the biggest pent up driving season on record as the US could reach herd immunity from Covid-19 by summer vacation time,” Innes stated.

Sigma Pensions

READ: Oil prices stay on course over successful rollout of COVID-19 vaccines

What to expect: The Oil market remains tight and global supplies will continue to draw until OPEC+ members change their output stance.

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Backwardation continues to generate positive carry for holding length further along the curve.

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Message Olumide on Twitter @tokunboadesina. He is a Member of the Chartered Financial Analyst Society.

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Commodities

Oil prices surge over China’s growing appetite for energy

British based contract ticked up by 0.3% to trade at $63.59 a barrel while the WTI futures edged near $60 a barrel.

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Where next for oil prices?, Brent crude futures gained 0.14 to trade at $34.70 at the time this report was drafted, recovering some of its losses earlier in the oil trading session. , Brent crude price fails to remain over $40, concerns over pledge cut strengthens

Oil prices rallied high at the second trading session of the week as data from the world’s second-largest oil consumer’s (China) import growth picked up coupled with rising tensions in the Middle East after rebels from Yemen disclosed that they fired missiles on Saudi’s energy infrastructure.

At the time of writing this report, the British based contract ticked up by 0.3% to trade at $63.59 a barrel while the West Texas Intermediate futures edged near $60 a barrel.

READ: Oil prices soar above $70 a barrel over terrorist attacks on Saudi’s oil station

The world’s second-largest economy recorded impressive gains for last month in yet another boost to China’s economic recovery as global demand gained momentum. Crude oil imports into China surged by 21% in March from a low base of comparison a year earlier.

Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics spoke on the parabolic of the energy market, as oil traders seem to be uninspired on the resurging COVID-19 virus;

“The oil market’s magnetic attraction to the $63 level should tell us much about the near-term outlook amid conflicting signal of new Covid waves coming to shore ahead of what should be a summer gasoline buying bonanza.

READ: Did OPEC+ April fool the oil market?

But overall, this is an oil market that feels completely uninspired outside of a few micro lurches here and there.

Sigma Pensions

Still, positive comments on the US economy from Fed Chairman Powell help to reassure the outlook for oil demand, balancing concerns about the continued spread of Covid-19 in some regions.”

What to expect

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Recent price actions suggest oil traders might hold the $60 a barrel baseline in the near term even if U.S Treasury yields surge while struggling to resolve with what form and fashion the next leg of the reflation trade will take.

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Commodities

Oil prices stay on course as Saudi’s Energy Minister reassures traders

British based oil contract traded at about $63 a barrel while the WTI futures were trading slightly below the $60 price level.

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Crude oil prices slump, as partial lockdowns resume

Crude oil prices remained relatively firm at the early hours of Friday’s trading session as oil traders digested Saudi Arabia’s defense of OPEC+ plans in raising output thereby capping gains.

At press time, the British based oil contract traded at about $63 a barrel while the West Texas Intermediate futures were trading slightly below the $60 price level.

Saudi energy minister Prince Abdulaziz bin Salman recently revealed that there were no pressing concerns of demand/supply dynamics changing gear amid the gradual boost in outputs in an interview aired on Thursday, adding that OPEC+ had all ammunition put in place to change course if necessary. OPEC+ will continue to meet monthly on reviewing the energy market supply dynamics.

READ: Has the Naira been devalued?

Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics spoke on the prevailing market sentiment amid macros pointing to more oil supplies hitting the sensitive energy market and an upsurge in COVID-19 caseloads.

“Positioning is much cleaner, although the market remains directionally long oil. However, the sudden calm and drop in volatility have attracted passive investors back to the fray as the market structure around prompt spreads start to tighten and the dollar begins to roll over.

“Still, the conflicting signals around OPEC+ supply coming back to market amid spiking coronavirus case numbers in India plus parts of Canada as well as Tokyo backtracking into the lockdown Abyss, together with reports linking the UK’s Covid-19 vaccine workhorse to the higher frequency of blood clots, continues to hold the bulls at bay.”

READ: Did OPEC+ April fool the oil market?

Sigma Pensions

What to expect: The most recent OPEC+ agreement on releasing barrels into such present demand was not out of place – suggesting the futuristic price of oil might range between the $60 -$70 price levels with production normalization vs current high excess production capacity taken into consideration.

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