The oil market
Crude inventories fell in recent weeks by 5.9 million barrels, compared to expectations of a withdrawal of 2.9 million barrels, due to news of a large withdrawal in product inventories. Distilled stock fell by 2.1 million against expectations of Milton Building, and a weak US dollar confirmed that oil trade is open for business again.
According to the headlines, this was actually a bullish report on oil from the United States. The US oil complex appears to be heading in the right direction with a massive oil draw, which is much smaller than the expected gasoline accumulation, and finally a distillation draw. It covered volumes about recovering US demand and the use of inventories due to reduced OPEC supplies.
Like OPEC on Tuesday, the International Energy Agency raised its estimate for total demand in 2021. The new figure is .796 MB / day, which is about 230,230 KB / day higher than the last estimate versus an increase of 20.7 MB per day, which was in 2005. 2020. Estimated non-OPEC supply for 2021 is only 600 cubic / day, up from 63.8 b / day last year. Risks remain regarding public data concerns, but so far agencies seem constructive about the oil theory. As the market improved and stocks decreased, evidence of this was once again good.
But, make no mistake, the world is still dealing with another form. Governments are trying to resist lock downs, but complex issues hang over the adenovirus vector vaccine. It's important to note that in-store simple vaccines like AZN and J&J are important in the global anti-trade off program as medical professionals continue to screen for potential side effects.
However, it might be time for traders to pull back and make some profits. Higher prices driven by strong demand could ultimately lead to an oversupply of OPEC +.
With oil prices returning to their perceived comfort zone (-60-70), buyers in Asia and even the US administration will be asked to keep prices under control because the last need for recovery is to get things done. Inflation is driving global production higher. OPEC + is well aware of this view, as Russian Energy Minister Alexander Novak reminded us in early April: "Now it is neither too hot nor too stressful for the oil market."
Indeed, after a bullish EIA report, the G10 commodity rose on the back of higher oil prices, while the Canadian dollar lagged behind its peers. In Toronto, losing deals and new closings are being traded against the currency, and the BOC in its decision next week is minimising the likelihood of a tipping announcement.
And while the Fed appears to want to avoid any good things, the European Central Bank appears to be convinced. Frances Governor of the Bank of France, told Bloomberg this morning that the central bank "is likely to exit PEPP by March 2022". This sounds like a marketing strategy to me. Thus, markets now see the ECB's June decision from the ECB more productive and likely to lead to faster curves, as an interim debate outside of PEPP will be discussed.
Therefore, with the euro narrowing the 10-year spreads against the US, this gives the euro a slight edge in the race to normalize policy.
The rally in the G10 commodity currencies led to a rapid sudden spike overnight in the US overnight after the release of a report on a truly bullish EIA stock, so one can expect that this color will hold back the price of oil due to the rapid rise in the price of this oil. The oil and gas sector wants to improve.
Gold has moved around the 1730 pivot area, the level it seems to be searching for forever. Gold remains broadly within the current limits, although the market is still in equilibrium. Besides the more balanced situation, the dollar's decline was a major factor of support. Although stocks have been acting as competitors for gold lately, stock policy at all-time highs encourages potential strong hands to return to the field in search of diversification.
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HassaanAli's Trading Journal