.....this is why I said playing the oil trade is dealing with...

.....this is why I said playing the oil trade is dealing with variables that can easily be reset .

....we would have thought that the partial EU oil sanction on Russia would have a positive effect on lifting the crude oil price, which it did for a short while....but a higher oil in the face of a slowing global economy is never in the interest of OPEC. So here you see now report of Saudi stepping up to increase production, as I indicated would happen.  

...for oil micro caps that bank on oil price going higher to sustain speculative interest, at best you're playing with short term moves (hoping it could get to $120-125 before plunging) , certainly not Buy and Hold. For major oil stocks , it is the longer term sustainable high oil price that matters, in other words the higher oil price goes, the bigger the chance of a recession and with it demand destruction and oil price plunging ...so oil price going higher and higher is not good news for the major oil stocks in the medium to long term. You must surely know that the oil trade has a soon used-by date that is expiring soon. First with the speculative ones, then the majors. The speculative ones can't go higher without oil price going higher to sustain speculative interest and Saudi/OPEC is unlikely to want that (super high prices). If you have to punt, understand punts have expiry dates.
Oil Slides as Report Says Saudi Arabia Prepared to Boost Supply

Commodities38 minutes ago (Jun 02, 2022 11:44)





© Reuters.
(Bloomberg) -- Oil tumbled below $113 a barrel following a report that Saudi Arabia is ready to pump more should Russian output decline substantially due to financial sanctions because of the war in Ukraine.

West Texas Intermediate futures slumped as much as 3% in early Asian trading after edging higher Wednesday. The Financial Times reported that Saudi Arabia had indicated to western allies that it is prepared to raise oil production. The news comes ahead of an OPEC+ meeting on Thursday that’s expected to see the group ratify a modest increase in output for July.

The war has fanned inflation, driving up the cost of food to fuels and led to aggressive monetary tightening by central banks. JPMorgan Chase & Co. (NYSE:JPM) CEO Jamie Dimon warned investors to prepare for an economic “hurricane” as the economy struggles against an unprecedented combination of challenges.

OPEC+ is expected to rubber-stamp a production increase of 430,000 barrels a day for July, although the cartel has struggled to meet its supply targets over recent months. The group’s actions have also failed to quell a volatile market that’s been whipsawed by Russia’s invasion of Ukraine.

Oil capped a sixth monthly advance in May, the best winning streak since early 2011, as tightening markets due to the Russian war coincided with rebounding demand. Prices may rise further as the European Union edges toward a partial ban of Russian crude and as China cautiously emerges from virus curbs.

The American Petroleum Institute reported that US crude inventories fell by 1.18 million barrels last week, while gasoline stockpiles dropped by 256,000 barrels, according to people familiar with the figures. Energy Information Administration data is due late Thursday.

©2022 Bloomberg L.P.

Oil Slides as Report Says Saudi Arabia Prepared to Boost Supply





Add a Comment