Oil prices have fallen sharply since hitting a new high on Friday. The landing of Hurricane Beryl in Texas are the main talking points at the beginning of the week.
Any positive developments in the talks are likely to have an impact on the geopolitical premium currently priced in oil markets.
Hurricane Beryl has hit Texas as market participants worry about the potential impact on U.S. refineries as summer demand peaks. Last week’s drop in crude oil inventories boosted recent hopes that lower inventories could help maintain support in oil prices over the medium term.
OPEC+ crude oil production falls in June
OPEC+ crude production from members fell under production cuts for a third straight month in June, as lower Russian output offset increases from some steadily excess producers.
Production fell by 90,000 bpd to 33.98 million bpd in June, according to Argus estimates, a three-year low. But it could have been even lower, with the coalition exceeding its target for this month by 130,000 barrels per day.
The decline in OPEC+ production has contributed significantly to the tightening of oil markets in recent weeks. The increase in oil prices of $7 to $8 a barrel over the past month is likely to be a relief for OPEC+, which initially saw price declines after key members signaled plans to start breaking up some production cuts starting in October.
Geopolitical factors Geopolitical factors play an important role in shaping oil prices. International relations tensions, geopolitical disputes, economic sanctions, threats to oil facilities, and disruption of oil supplies from key production areas can all lead to sharp fluctuations in oil prices.
Current oil price trends and future expectations
The crude oil market was very weak in the first few hours of Monday, but at this point, the market is likely to bounce back to the uptrend, as we have already seen a little of this action from the previous resistance barrier showing the market’s memory.
WTI Crude Oil Technical Analysis
The WTI crude market initially fell slightly during Monday’s trading session, but then turned to show signs of life near the $81.50 level. At this point, I think we will try to go back towards the $84 level, but we will have to wait and see if we can break above that level or not. If we could break above that level. With all factors neutralized, I think this market is still noisy, but it makes a lot of sense that the crude oil market will try to absorb some recent gains..
Brent Technical Analysis
When I look at the Brent market, I notice that the $85 level provided support and we switched from there. I think in the end we will rise. Eventually, the Brent market will follow the WTI crude market. So it’s just about trying to track down any momentum we’re getting. Keep in mind that this time of year is usually very positive for crude oil anyway..
So, there is a belief that it all relates well together. To be sure, we have enough geopolitical concerns to keep oil rising somewhat. Of course, travel still seems to be a major thing there. This, of course, has led traders to doubt that we will get more demand. I have no interest in selling crude oil anytime soon. And I think we’ll continue to rise throughout the rest of the summer..
The impact of oil inventories and the hurricane on energy prices in the summer
Oil inventory data is very important as the US and Europe are currently in the middle of summer. This period is usually the peak driving season in the United States, leading to higher demand for oil and other oil-related products.
Given the busy summer season in the United States, there is a good chance that weekly oil inventories will fall more than expected. This could help keep oil prices strong and prevent any significant price drop in the long run.
Thummel emphasizes the United States’ position as “the world’s largest energy exporter,” highlighting the importance of the hurricane’s route through a major port for energy infrastructure and commercial operations. However, Thummel points out that these disruptions could lead to a temporary price drop for US consumers, describing it as the “primary impact” of the hurricane on energy markets.
Uh, uh uh actually for the American consumer, this is probably a good thing because you’re going to see more supply of these products, but not as much demand from the export side.
So prices are likely to temporarily drop here as an effect or as a fundamental effect or effect of the drilling itself, how much pressure do you think we can see on prices?
Oil prices in particular are around 82, and there is likely to be a geopolitical risk premium of a few dollars in oil right now.
It is possible that oil prices are going back to $80 per barrel. So, not a massive amount, but a little, and with that in mind, I mentioned something really fundamental and that is that more infrastructure is already being built to withstand weather events like this for industry and operators.
