MCX Crude Stop Loss Hit 4933 Crude Call Closed – Neal Bhai Reports
The recent gains in WTI and Brent were a treat for investors and a boon for oil bulls. The original catalyst for this most recent rally was a bullish inventory report, with the EIA announcing that inventories at Cushing, Oklahoma, had declined by 5.8 million barrels. A larger than expected drop of 600,000 bpd in Iranian exports helped to drive prices higher still. Finally, the maiden speech of the Fed’s new chairman, Jay Powell, served to weaken the dollar and send oil prices upwards once again.
But these factors alone are not enough to create a sustainable oil rally, especially with the escalating trade war between China and the U.S. threatening demand and the dollar set to strengthen in September. The wild card in all of this is the total impact of U.S. sanctions on Iranian crude flows.
Fereydoun Barkeshli, President of both the Vienna Energy Research Group and the Iranian Association for Energy Economists has questioned the sustainability of today’s oil price rally. He says that with oil prices at a two-month high “the proposed release of SPR by Trump in October and the decision by OPEC to increase production will play with the sentiment in the months to come.” In Barkeshli’s view “the response from Iran will now determine the future course of oil prices. If Mr. Trump avoids policies that will cause panic in markets it is unlikely that prices will reach $80 a barrel”.
