Last quote by Tamas Varga
Tamas Varga quotes
Hopes have been running high about the potential bullish impact of the planned OPEC/non-OPEC production freeze but it is hard to see how sticking to the January output level would be supportive for oil prices. There will be no re-balancing this year.
Oil prices are up due to the Chinese reserve ratio requirement cut and reports on a dropping oil production.
The underlying fundamentals are still bearish and the market is reacting this morning.
The draw in distillate stocks is bullish, but we know there was cold weather in the United States in the last week, so I would say the reason behind the draw has something to do with the cold winter weather and, as such, the impact should be short-lived.
There is no fundamental justification whatsoever to think that the current downtrend is changing. All one has to do is look this month's report from the IEA to see that, especially the first half of this year, the market is going to be oversupplied.
It seems to be a healthy upside correction in an otherwise downtrending market.
It is the Chinese stock market sell-off and the strong dollar that are pressuring oil.
When the Saudis are cutting prices, the markets are not going to go higher.