The oil market finds it increasingly challenging to rally sustainably, at least this is what yesterday’s and, in general, this week’s performances imply. There is now a growing belief that more supply will be available soon. Since Heating Oil and Gasoil are driving the current move lower, it is a safe bet to deduce that this potential extra volume of oil will come from Russia.
Concurrent, competing and cancelling-out events are compelling investors to slowly holster their investment guns as the end of the year approaches. There is little shock in how the Federal Open Market Committee shaved a quarter of a point from interest rates in the United States and as predicted it was not a wholly unanimous outcome. There were three dissents in the end, two for holding rates and one for a ‘double’ cut.
The move lower in oil prices continued yesterday, and given the updated EIA report on the global balance, one might be perplexed as to why daily losses in WTI and Brent amounted to a mere 60 cents/bbl. We will take a deep dive into the numbers after OPEC and the IEA release their own findings tomorrow.
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