The crude oil market found a vigorous degradation on Tuesday. The expressions of crude oil for the first time after August are rolled under a 90 dollar barrel. At prices this softness came after that statement of the US President Donald Trump, in which he indicated that there is no longer any need for new US attacks on Iran. This statement has significantly increased the hope of reducing tension in the Middle East
ACCORDING TO THE MARKET’S FRESH DATA, BRENT CRUDE FUTURES WAS BROKEN BY 2.8 PERCENT TO TRADE ON A BARREL OF 89.95 DOLLARS. WHILE THE AMERICAN BENCHMARK WEST TEXAS INTERMEDIATE I.E. WTI CRUDE FUTURES ALSO CAME TO THE LEVEL OF $84.56 PER BARREL WITH A WEAKNESS OF 2.6 PER CENT
Trump’s statement and the bustle of peace talks:
During a press conference in the White House Trump said that they expect the Iran war will end very soon. However, he also cleaned that naval blockade against Iran will continue largely as before. Trump further said that the confrontation with Iran has been practically eliminated if it is seen at the military level
This comment of the Trump came on Monday after the meeting with Qatar Prime Minister Sheikh Mohammed bin Abdulrahman al-Thani. The potential Iran agreement was discussed in this meeting. Qatar has long been playing the role of a main arbitrator between Washington and Tehran, although many efforts of the peace agreement have been neutralized in recent times
On the other hand, Iranian authorities have refused to clean any direct interaction with the US. Iran’s Supreme National Security Council Secretary Mohsin Ragei wrote on social media that Washington should stop spreading fake news about fictional talks
Fresh statistics of supply and production:
The struggle has now reached its ninth month due to which the supply of crude oil from the Middle East has been badly affected. There was a deep impact on the trade from Hormuz, especially the Hormuz (Strait of Hormuz), which was the major route of the world’s fifth-part oil and Liquiified Natural Gas (LNG) before the U.S.-Israeli attacks began in February. However, recent shipping data shows that the US military presence and security is now improving significantly in the movement of tankers on this route
MEANWHILE, GLOBAL OIL PRODUCTION IS ALSO BEING INCREASED. A RECENT SURVEY OF THE ORGANIZATION OF PETROLEUM EXPORTER COUNTRIES (OPEC) REVEALED THAT THE RAW OIL PRODUCTION OF THIS GROUP IN OCTOBER HAS REACHED ABOUT 90 PERCENT OF THE LEVEL BEFORE THE IRAN CONFLICT. ACCORDING TO SURVEYS, OPAC’S PRODUCTION IN OCTOBER 13.8 MILLION BARRELS ROSE DAILY TO 2.287 CRORE BARRELS PER DAY
THE ANALYSTS FROM THE ING (ING) COMMENTED ON THE MARKET POSITION SAID THAT THE MEDIAL EAST EVENTS HAVE FOUND A LOT OF FLUCTUATIONS IN THE OIL MARKET THIS YEAR. HOWEVER, DESPITE NO FORMAL AGREEMENT BETWEEN THE U.S. AND IRAN, THE CRUDE OIL FLOW FROM THIS REGION BY THE END OF THE YEAR IS APPROACHING THE LEVEL OF ALMOST BEFORE THE WAR. ANALYSTS BELIEVE THAT THE OIL SUPPLY IS NOT COMPLETELY NORMAL EVEN IF IT IS RETURNING TO THE TRACK, BUT THE WAY THIS OIL IS COMING OUT. THE LARGER BOUNCE IS BEING SEEN IN THE FREIGHT RATES OF TANKERS BECAUSE OF THE HITCHES COMING INTO THE MOVEMENT OF THE VESSELS
Conclusions for Raw Oil Traders:
A 90 dollar level breakdown for crude oil traders is a major technical and psychological change. Trump’s statements and OPAC’s growing supply has lowered geopolitical risk premium from the market at the moment. However, given the high cost of Iran’s stringent stance and tanker shipping can remain volatility. Traders should wait for the prices below 90 dollars before any new aggressive position and keep a pan on statements coming from the Middle East