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Crude Oil: Rebound Pushes Commodity Far From Bearish Side

By Sunshine Profits (Sébastien Bischeri)CommoditiesJun 29, 2022 10:45AM ET
www.investing.com/analysis/crude-oil-rebound-pushes-commodity-far-from-bearish-side-200626471
Crude Oil: Rebound Pushes Commodity Far From Bearish Side
By Sunshine Profits (Sébastien Bischeri)   |  Jun 29, 2022 10:45AM ET
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Demand for crude oil is accelerating—a bullish sign for its prices. What may the current energy market environment say about the black gold’s outlook?

A Chinese Panda’s Appetite

On the Asian continent, lifting health restrictions in China could signal a resume in oil demand for the world’s top consumer. Given the context of tight supply, this has partially triggered a rebound in crude while driving prices higher.

Geopolitical Scene

The Libyan National Oil Company (NOC) warned that they could declare a state of “force majeure” on the facilities in the Gulf of Sirte—blocked due to the political crisis that has been hitting the country for months.

In Ecuador as well, the specter of a halt in oil production is becoming clearer following the blockades and demonstrations initiated by a movement protesting the rise in the cost of living.

OPEC+ Struggles to Increase Volumes

The United Arab Emirates assured that they were at maximum capacity, while Saudi Arabia stated it could pump an additional 150,000 barrels per day. It is important to note that these two producing countries are indeed the two OPEC+ members perceived to have the sparest oil production capacity. The 23 members of OPEC+ are just starting a series of two-day e-meetings on Wednesday (they should also meet on Thursday by videoconference) to decide on a new adjustment to their total volume of production of black gold. However, analysts expect the status quo despite numerous calls for action.

Fed’s Recession Denial?

The US economy is slowing down, but not to the point of falling into recession, the president of the New York branch of the Federal Reserve (Fed) said to CNBC Tuesday. The mighty Federal Reserve has raised rates three times since March. The latter is now in a range between 1.50% and 1.75% after remaining close to zero during the COVID-19 pandemic.

Fundamental Analysis

On Tuesday, the American Petroleum Institute (API) released their weekly oil stock figures.

The weekly commercial crude oil reserves in the United States dropped to -3.8M barrels while the forecasted figure was just about -0.110M, according to figures released on Tuesday by the US American Petroleum Institute (API).

U.S. Weekly Commercial Crude Oil Reserves
U.S. Weekly Commercial Crude Oil Reserves

US crude inventories have thus decreased by over 3.799 million barrels, which firmly shows accelerating demand and could be considered a strong bullish factor for crude oil prices. This figure would indeed signal a rise in fuel consumption. As a result, demand is now holding up well as the peak of the summer driving season approaches with many trips.

U.S. Crude Inventories
U.S. Crude Inventories

Source: Investing.com

Crude Oil Futures Daily Chart
Crude Oil Futures Daily Chart

WTI Crude Oil (CLQ22) Futures (August contract, daily chart)

RBOB Gasoline Futures Daily Chart
RBOB Gasoline Futures Daily Chart

RBOB Gasoline (RBQ22) Futures (August contract, daily chart)

Brent Crude Daily Chart
Brent Crude Daily Chart

Brent Crude Oil (BRNQ22) Futures (August contract, daily chart) – here it is represented by its Contract for Difference (CFD) UKOIL

* * * * *

The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Crude Oil: Rebound Pushes Commodity Far From Bearish Side
 

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Crude Oil: Rebound Pushes Commodity Far From Bearish Side

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