Last quote by Ole Hansen
Ole Hansen quotes
Prices are up on a weaker dollar in the aftermath of the U.S. ISM numbers yesterday and Putin's latest attempt to stabilize the price.
API (data) showed a big build last week and that supported the quick turnaround in sentiment.
The U.S. job report took us from the lows on June 3. Brexit worries then gave us the next boost and yesterday the FOMC provided enough dovish ammunition for it to make a new high.
We've seen the market slump 10 pct from the highs since this (Canada) news came in, which suggests that there are other fish to fry at the moment.
This whole recovery has been driven by supply being capped and supply is price-sensitive and again we're back to levels where we could see some of these producers breathe again.
The rise in OPEC production we saw last year was in order to alleviate the pressure from reduced supplies from Libya. They're now coming back, so we should expect some kind of reaction sooner or later. But at the moment we're seeing a production rise from Iraq, it could potentially rise from Iran as well and Saudi Arabia at this stage is willing to give up its market share.
Rising supplies are keeping prices under pressure. Some of the geopolitical risk premium that we saw building up over the summer, especially related to Iraq, has disappeared. We are coming into the time of year – over the next couple of months – where demand from refineries generally tends to slow down, so the near-term outlook is possibly for weaker prices still.