Oil prices have gone up, however incredulous we are, we indicate the falsity of this rise. It does not reflect the expectation of something that will happen positively in a real way, and future cuts.
We can indicate concerted movements on the Future, but they will not last for a long time.
Iraq and Kazakhstan’s plans to compensate for overproduction in May on their supply-cutting commitments have supported the market. The promises came out of a meeting by a compliance monitoring panel of the Organization of Petroleum Exporting Countries and its allies, a group called OPEC +.
- If the late producers compensate for their overproduction in the next three months, this would effectively eliminate the extra barrels from the market, even if OPEC + will not extend its record offer of 9.7 million barrels per day cut beyond July.
Short-term optimism about these supply cuts eases the pressure on storage, helped Brent.
US crude inventories rose as inventories of gasoline and spirits declined last week, the Energy Information Administration reported Wednesday.
In addition, U.S. shale producers are expected to restore roughly half a million barrels per day (bpd) of crude production by the end of June, according to oil buyers,
such a rapid increase in US production would complicate the efforts of the main producers in Saudi Arabia and Russia.
In short, there are subtle problems with the various agreements. Everyone hopes that oil will remain in the $ 30 area, the writer predicted a correction in that area, but we doubt that prices will be able to stay at these levels for some time.
The market cannot be managed in the long term.
We report that “Backwardation” occurs when short-term contracts are traded at higher prices than in the external months due to abnormal circumstances. Normally oil futures trade in “contango”, with the external months at higher prices, reflecting the cost of holding oil…….
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Commodities strategist, expert in supply chain market, procurement, forex and advisor Stablecoins. www.goldencross.io