Crude is bullish as supplies are squeezed

In this article, we will cover Exness opinions alongside reporting from Wall Street Journal, a commercial partner of Exness.

Newly released data from the Nigerian Upstream Petroleum Regulatory Commission indicated that last month's total oil production dropped 10% by around 4 million barrels to 33.5 million barrels  per day. The fall is estimated to cost Nigeria around $325 million (USD) and add to the already precarious supply-to-demand deficit. USOIL has already jumped +13.26% from $79.20 to $89.70 over the last three days, most likely due to the expected lower OPEC+ exports in August, and the Nigerian cut may fuel a continuation.

While USOIL is a long way from the July high of $1978, which in turn is far from the $2049 high of 2023, the break in the downtrend could be an early sign of oil’s rollercoaster price heading for an overdue recovery. Exness’ trading sentiment at the time of writing shows 75% of traders are now bullish on USOIL, as the micro-rally continues to gain traction. Here’s what The Wall Street Journal had to say about crude prices today.

Oil Rises As Speculators Bet on Higher Prices

UPDATED AUG 21, 2023 03:24 AM EDT

0722 GMT – Oil prices are rising, with speculators looking to position for higher prices in the near future, amid tight inventories globally. Brent crude and WTI are both up 0.9% to $85.54 a barrel and $81.36 respectively. “The latest positioning data shows that speculators increased their net long in ICE Brent by 19,748 lots to 230,735 lots,” ING analysts highlighted in a note. Traders took advantage of the lower prices seen last week to set their long positions, ING said. “The market appears to be concerned about the fact that [Amsterdam-Rotterdam-Antwerp region] gasoil inventories are still looking quite tight and we are yet to start seeing a build in inventories as we edge closer towards the start of winter.” The ARA region is one of the main oil hubs globally.

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Author:

Paul Reid

Paul Reid is a financial journalist dedicated to uncovering hidden fundamental connections that can give traders an advantage. Focusing primarily on the stock market, Paul's instincts for identifying major company shifts is well established from following the financial markets for over a decade.