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MNI COMMODITY WEEKLY: Supply Squeeze Turning Oil Market Bullish

ENERGY
Executive Summary:
  • Supply Squeeze Turning Oil Market Bullish: Oil prices climbing towards $90/bbl as a squeeze on supplies sparks bullish sentiment. Attacks on Russian refineries and a halt on Mexico’s exports have accelerated supply anxiety from OPEC+’s output cuts during Q2.
  • Oil Market: Crude market gains have driven front month Brent to the highest since 30 October amid signs of a potential improvement in Chinese demand to add to tighter supplies and a possible deficit in Q2 and paired with an escalation in Middle East tensions. Gasoline and diesel cracks are weighing disruption to Russian exports against rising US refinery runs.
  • Gas Market: European gas prices have eased back amid bearish short-term fundamentals at the start of the injection season. Global LNG prices mirrored losses, due to an easing back in Japanese LNG buying paired with mild weather in the northern hemisphere. US natgas, in contrast, rebounded slightly this week amid lower domestic production.

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MNI Commodity Weekly - Supply Squeeze Turning Oil Market Bullish.pdf

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