Take A Break

By: Matt Rosenberg / July 27, 2018

Oil markets finished higher again yesterday continuing the current upward trend.  At the close of the session, WTI crude closed up $0.31/bbl to close at $69.61.  RBOB and HO also closed higher by $0.0392/gal and $0.0257/gal to finish at $2.1623/gal and $2.1769/gal respectively.

Markets are mixed today on light trading and very little news driving the market.  Three factors offering some support however are Saudi Arabia halting crude transportation through a key shipping lane, falling inventories in the U.S. and easing trade tensions between Washington and Europe. 

Image result for Bab el-Mandeb Strait

“The major source of bullish impetus stemmed from Saudi Arabia’s decision to temporarily halt all oil shipments through the Bab al-Mandeb Strait” said an industry analyst from the brokerage firm PVM.  This temporary halt, due to attacks on oil vessels by militants in Yemen, is currently having minimal impact and a supply disruption is not expected.  A move to block the strait however would essentially stop oil shipments through the Suez Canal and the SUMED crude pipeline linking the Red Sea and Mediterranean Sea.  According to the U.S. Energy Information Administration, approximately 4.8 million barrels per day of both crude and refined products flow through that strait towards Europe, the U.S. and Asia.  Adding support to the energy sector is the recent agreement between the U.S. and the European Commission alleviating the risk an immediate trade war which would have major global economic implications. 

Image result for Bab el-Mandeb Strait

As of this writing RBOB is currently trading up slightly over $0.0100/gal while HO is somewhat flat heading into the weekend.

Sources:

https://www.cnbc.com/2018/07/27/oil-markets-saudi-arabia-halt-and-us-inventory-drop-in-focus.html

http://halturnerradioshow.com/index.php/news/world-news/2903-saudi-arabia-is-halting-all-oil-shipments-through-the-bab-el-mandeb-strait-after-continued-militant-targeting-of-vessels

https://oilprice.com/Energy/Crude-Oil/Tight-Oil-Markets-Are-Ignoring-Supply-Risk.html

https://www.reuters.com/article/global-oil/update-1-oil-markets-slip-after-3-days-of-gains-us-europe-trade-tension-eases-idUSL4N1UN1KD

 

 

 

 

 

 


Categories: Daily Market Update, Saudi Arabia


Matt Rosenberg

Written by

Matt Rosenberg

As a key accounts manager, Matt helps large customers make mission-critical decisions by providing timely advice regarding market conditions.


Guttman Energy Daily Market Update Disclaimer – The information contained in this market update is derived from sources believed to be reliable; however this update could include technical inaccuracies or typographical errors and Guttman Energy does not guarantee the accuracy, completeness or reliability of this update. FURTHERMORE, THIS UPDATE IS PROVIDED "AS IS," WHERE IS, WITH ALL FAULTS AND WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY. GUTTMAN ENERGY ALSO SPECIFICALLY DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES. YOU USE THIS UPDATE AT YOUR SOLE RISK. This update and any view or comment expressed herein are provided for informational purposes only and should not be interpreted in any way as recommendation or inducement to buy or sell products, commodity futures or options contracts.


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