Oil tends to trade in the offer and demand for the foundations, and right now these foundations are mostly not. The oil supply rises while the demand is just that way.
Normally this would cause prices to fall, but in recent weeks of oil has refused to drop. Brent Crude, the International Benchmark, rose by 0.5% to $ 68.47 per barrel on Tuesday after a 1% rose on Monday and in the previous two weeks in a row. West Texas Intermediate, American benchmark, has also increased in this time range.
The oil also persisted. The SPDR Sector Energy SPDr SPDr has increased by 6%in the last month.
The rally comes when investors have prepared for oil. According to Rebecca Babin, senior traders in private wealth of CIBC, energy traders would do twice as much betting to bring oil as betting, that it would rise in the last week, pushing a long -standing US oil ratio to its most bearish level. That could be a sign. In the second half of 2008, oil dropped by more than 60%.
The reason why merchants are bear is that manufacturers draw more oil than consumers use. In 2025, the offer on the track is to grow by 2.5 million barrels a day, although only 680,000 barrels are increasing according to the International Energy Agency or IEA.
After spent years of possession, OPEC and allies, as Russia, agreed to restore 2.2 million barrels this year. And producers outside OPEC are also increasing.
There are three main factors that maintained prices increased. The first is that China is buying an extraordinary amount of oil to store. This year, China is buying an average of 530,000 barrels per day for storage, which is about twice as much as usual, according to Jim Burkhard, the global survey leader in S&P Global Commodity Insights. China, which must import most of its oil, has about 1.4 billion barrels in the repository, compared to around 800 million for the US
Sklapa oil could make China less dependent on the US because both nations escalate business fight.
“This fits in a wider pressure of China to try to isolate from vulnerability in foreign supply chains,” Burkhard said. However, it expects storage to slow down soon, as refineries have deposited almost enough oil to adhere to government directives.
Other geopolitical factors also maintain increased oil prices. President Donald Trump threatened breathtaking sanctions against Russian business partners, such as India if Russia disagrees with the stopping of fire in Ukraine. If Russian oil became the market, prices would increase.
Another big reason why oil prices remained increased is that the demand has remained relatively strong in the last few weeks. The demand of refiners tends to be strong when the summer is in the northern hemisphere because people run more. However, the day of work came and left, and a road trip Oil could also end early.
“After the summer – September, October – that’s when we expect the surplus to become much more visible,” Burkhard said.
By the end of the year, oil prices see below $ 60.
Babin also thinks that the foundations look like a bear about oil, but she is not sure that prices will drop dramatically. Traders are already ready for a drop, so there is less chance that they will be surprised by the negative news that evokes a select.
“It is such an opinion on the consensus that it is already placed in advance,” she said.
If the bad message is baked for the price, it could continue on the bulls of the oil.
(Tagstotranslate) Oil supply
