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OIL:  US Inventory Led Weakness Steadies in Asian Trading. 

OIL
BulletEnergy BulletsCommodities
  • Oil prices lost ground overnight as concerns as to an escalation in Ukraine were overshadowed by a jump in US inventories.
  • US crude inventories rose 4.8m barrels last week and gasoline 2.05m barrels.
  • This damped the prospects for oil which had been alert to the news of the use of US and UK made missiles used by Ukraine on Russia.
  • WTI peaked at US$70.15 during the US trading day, finishing the day at $68.87 following the inventory report. It has opened in Asian trading a touch firmer at $69.04 before trading down to $68.90.
  • Brent had peaked at US$73.94 during the US trading day only to finish at $73.30 and has traded around $72.92 / $72.98 for most of the day.   
  • The inventory story and its impact on prices should remain temporary as Russia’s veiled threats for nuclear retaliation remain prominent for investors.
  • In the Middle East efforts remain ongoing to find a ceasefire between Hezbollah and Israel as Joe Biden’s time as US President comes to an end.
  • In the options markets, the premiums for bullish call options over bearish put options in Brent futures has disappeared at time where the additional risk premium that oil futures have had embedded in them (due to war-related supply issues), has all but disappeared since Trump’s election. 
  • Data released from China customs yesterday show that Malaysia has replaced Saudi Arabia as China’s second largest supplier of oil, behind Russia.

 

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  • Oil prices lost ground overnight as concerns as to an escalation in Ukraine were overshadowed by a jump in US inventories.
  • US crude inventories rose 4.8m barrels last week and gasoline 2.05m barrels.
  • This damped the prospects for oil which had been alert to the news of the use of US and UK made missiles used by Ukraine on Russia.
  • WTI peaked at US$70.15 during the US trading day, finishing the day at $68.87 following the inventory report. It has opened in Asian trading a touch firmer at $69.04 before trading down to $68.90.
  • Brent had peaked at US$73.94 during the US trading day only to finish at $73.30 and has traded around $72.92 / $72.98 for most of the day.   
  • The inventory story and its impact on prices should remain temporary as Russia’s veiled threats for nuclear retaliation remain prominent for investors.
  • In the Middle East efforts remain ongoing to find a ceasefire between Hezbollah and Israel as Joe Biden’s time as US President comes to an end.
  • In the options markets, the premiums for bullish call options over bearish put options in Brent futures has disappeared at time where the additional risk premium that oil futures have had embedded in them (due to war-related supply issues), has all but disappeared since Trump’s election. 
  • Data released from China customs yesterday show that Malaysia has replaced Saudi Arabia as China’s second largest supplier of oil, behind Russia.