Latest news with #JoeDeLaura
Yahoo
12-07-2025
- Business
- Yahoo
Oil Market's Focus Shifts to Demand as Trump Reignites Trade War
(Bloomberg) -- While US President Donald Trump's chaotic tariff strategy has disrupted the oil market for months, his renewed attacks on trading partners this week have solidified consensus on at least one matter: The outlook for crude demand is set to worsen. Singer Akon's Failed Futuristic City in Senegal Ends Up a $1 Billion Resort Why Did Cars Get So Hard to See Out Of? Can Americans Just Stop Building New Highways? How German Cities Are Rethinking Women's Safety — With Taxis Denver City Hall Takes a Page From NASA Investors in oil had largely overlooked trade news for weeks as the conflict in the Middle East commanded price action, but Trump's recent barrage of tariff letters — containing some of the highest tax rates yet — is reviving concerns that a global trade war will reduce crude consumption. The prospect of waning demand is dealing another blow to a market already suffering from widespread expectations of a glut later this year. In addition to the trade war, a dour economic outlook for top crude importer China is fueling concerns that the market will struggle to absorb extra supply in the second half of the year. 'All the focus is on demand and tariffs,' said Joe DeLaura, global energy strategist at Rabobank. The rapidly weakening outlook triggered the sharpest drop in hedge fund sentiment on oil since February. Money managers slashed their bullish position in US crude by 29,994 lots to 148,106 lots in the week ended July 8, according to the Commodity Futures Trading Commission. Short-only bets rose to a five-week high, the figures show. This week's price moves also illustrate just how much demand concerns are driving the market. Oil futures shrugged off a decision by OPEC+ on Sunday to bring back more production than expected in August and instead rose after Saudi Arabia hiked prices for customers in Asia, which was viewed as a vote of confidence in demand. The topsy-turvy trading continued on Wednesday, when UAE Energy Minister Suhail Al Mazrouei's comments that the market needs more barrels pushed prices higher, even as data showed US crude inventories rose the most since January last week. 'If crude isn't going to sell off from a bigger-than-expected OPEC production unwind and a 7 million-barrel crude build, what exactly is it supposed to sell off on?' said Jon Byrne, an analyst at Strategas Securities. Crude did have one selloff last week, and again, it defied typical oil-market physics. Bloomberg reported that OPEC+ may halt output hikes, but instead of futures rising on the limit to supply, they fell 2.2% as investors interpreted the news as a sign of limited conviction that demand can keep up with output. The shift in focus is complicating the cartel's communications with the market, forcing traders to parse both overt supply messages and second-order demand signals every time the group makes a statement. 'Supply and demand balances have been challenging to track lately,' said Mark Malek, chief investment officer at Siebert. 'You have all kinds of factors that we never had traditionally,' including a burgeoning gray market and a fast-evolving news cycle. 'You don't see the clear patterns that you used to see in crude,' he added. In the near term, the peak driving season in North America and healthy refiner margins are propping up consumption, while OPEC members have been hard-pressed to ramp up output to meet their 411,000-barrel production goal for July. 'When you really look at exports compared to imports, you see a relatively balanced market,' said Samantha Hartke, Americas head of market analysis at Vortexa. Still, 'any indications of supply or demand weakness can easily tip the scale one way or another.' But expectations of demand deterioration are spreading. The International Energy Agency on Friday projected that world oil consumption will grow by just 700,000 barrels a day in 2025, the slowest pace in 16 years outside of the 2020 pandemic slump. The largest quarterly contractions occurred in countries in the crosshairs of the trade war, including China, Japan, Korea, the US and Mexico, the agency said. Trump's tariffs threaten to exacerbate the situation, with levies including a 50% tax on imports from Brazil — a significant supplier of crude to the US — potentially upending flows. Still, some lingering geopolitical tensions are preventing bearish sentiment from completely overtaking crude prices. Trump said he'll make a 'major statement' on Russia on Monday, raising speculation he'll push to curtail Moscow's oil exports. Meanwhile, deadly Houthi attacks in the Red Sea are maintaining concerns about key oil trade routes. More importantly, the oil market may take its cues from several major economic reports scheduled for the coming weeks, including US consumer price index data that may sway the path of monetary policy in the world's biggest economy. 'Prices are simply not justified,' said Scott Shelton, an energy specialist at TP ICAP Group Plc. 'The outlook for crude oil prices appears bleak to me.' --With assistance from Yongchang Chin. Trump's Cuts Are Making Federal Data Disappear Will Trade War Make South India the Next Manufacturing Hub? 'Our Goal Is to Get Their Money': Inside a Firm Charged With Scamming Writers for Millions Soccer Players Are Being Seriously Overworked Trade War? No Problem—If You Run a Trade School ©2025 Bloomberg L.P.
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Business Standard
14-06-2025
- Business
- Business Standard
Analysts see crude at $150 on panic buying if Israel-Iran tensions escalate
Brent crude oil prices can hit $150 a barrel (bbl) – up a massive 103 per cent from the current levels – in the worst-case scenario if Israel–Iran geopolitical tensions escalate, suggest analysts. However, if the conflict stays contained, then energy markets will re-adjust quickly. Israeli airstrikes on Iran last week had impacted energy prices with crude and natural gas prices surging as it reignited concerns about a wider conflict in West Asia. Brent crude oil prices hit $78.5/bbl in the wake of the airstrikes before dropping back to around $75/bbl. TTF (Title Transfer Facility) gas prices – a virtual trading point for natural gas in the Netherlands – surged over 5 per cent to €38.24/MWh last week in the backdrop of the developments. The attacks, according to analysts at Rabobank International, expose the wider risks to crude and natural gas supplies from the region despite the initial quick reversal of price gains for both markets. If crude, refined products and/or liquid natural gas (LNG) supplies from key producers like Saudi Arabia, the UAE, and Qatar are curtailed through direct attacks on energy infrastructure or the closure of the Strait of Hormuz, crude oil price spikes could break and sustain above the $120/bbl mark, they said. 'In case Saudi oil, gas, shipping, or refining infrastructure are targeted and destroyed, crude prices would rise above $120/bbl, even as far as $150/bbl on the initial panic buying," wrote Michael Every, global strategist at Rabobank International in a co-authored note with Joe DeLaura and Florence Schmit. Crude oil price spike Iran, meanwhile, has claimed dominion over the Strait of Hormuz, which is a major chokepoint central to the global energy market. The Strait is a transit point for 17 per cent of world oil flows (about 17 million barrels per day) and convoys of tankers from Kuwait, Iraq, Bahrain and Saudi Arabia. Qatar, Oman and the UAE operate around 98 million tons of LNG export capacity, about 18 per cent of the world's LNG supply, with most of these volumes also transiting through the Strait, reports suggest. 'Another 10 per cent rise in oil is possible due to ongoing war. Post that, it may cool off if conflict moderates due to international pressures. In case war intensifies and goes on for few months, then oil price may hit $100/bbl,' said G Chokkalingam, founder and head of research at Equinomics Research. The threat of around 1.5m barrels per day (b/d) of Russian supply going dark through sanctions during the initial stages of the invasion of Ukraine by Russia had sent Brent prices to $139/bbl three years ago, but only for about a week, and prices stayed above $100/bbl for only five months, data shows. According to Platts OPEC Survey, Iran pumped 3.25 million b/d of crude in May, with roughly 2.2 million b/d of refining capacity and 600,000 b/d of condensate splitting capacity. However, exports dipped below 1.5 million b/d in May as floating storage levels surged amid rising tensions. 'If Iranian crude exports are now disrupted, Chinese refiners, the sole buyers of Iranian barrels—would need to seek alternative grades from other Middle Eastern countries and Russian crudes. This could also boost freight rates and tanker insurance premiums, narrow the Brent-Dubai spread, and hurt refinery margins, particularly in Asia,' cautions Richard Joswick, head of near-term oil analysis at S&P Global Commodity Insights.
Yahoo
01-05-2025
- Business
- Yahoo
Saudi Shockwave, Russian Sanctions, and a Crude Comeback--Is $60 Oil Just the Calm Before the Storm?
Brent crude is clawing its way back. After dipping below $60 earlier in the week, the benchmark rebounded 0.7% as US tech earnings lit a fire under equity markets and whispers of Trump easing tariff threats lifted investor sentiment. But let's not confuse a bounce with a breakthrough. The bigger story is the undercurrent of supply pressureApril's selloff was no fluke. With both the US economy contracting and Chinese factory activity hitting its worst levels since 2023, the demand backdrop remains fragile. And yet supply is about to get interesting. OPEC+ jolted markets last month with an unexpected production boost, and the Saudis may not be done. Reuters reports that Riyadh is signaling it can stomach lower pricespotentially setting the stage for another output surge at the May 5 meeting. Add in new barrels from Guyana, and you've got a market bracing for oversupply. Traders are pulling back ahead of OPEC, said Rabobank's Joe DeLaura. Translation: the risk-on trade is pausing while everyone waits to see if Saudi Arabia is about to flood the zone. Meanwhile, the geopolitical backdrop is anything but calm. Senator Lindsey Graham says he has 72 votes lined up for a bill to slap bone-crushing sanctions on Russia and impose tariffs on nations still buying its oil. The US is also cracking down harder on Iranian and Venezuelan crude. So while inventory data showed tighter US fuel supplies, macro risks continue to build. For energy-exposed names like ExxonMobil (NYSE:XOM) and Tesla (NASDAQ:TSLA), this isn't just about priceit's about navigating the sharp turns ahead. This article first appeared on GuruFocus.
Gulf Insider
04-03-2025
- Business
- Gulf Insider
Oil Prices Plunge As OPEC+ Confirms Output Hikes Amid Trump Pressure
It's real this time… While we have seen numerous examples of 'strawman' headline leaks from OPEC meetings in the past to test the market's reaction to various scenarios, it appears this one is real as OPEC just issued a statement confirming the outout hikes: 'This gradual increase may be paused or reversed subject to market conditions,' according to the statement. 'This flexibility will allow the group to continue to support oil market stability.' The group's choice may be yet another illustration of the sway of Trump, who last month called on OPEC to 'cut the price of oil.' Additionally, Trump's renewed 'maximum pressure' on Iranian exports could create a gap for other OPEC+ nations to fill. OPEC's decision implies 'that the alliance is feeling the pressure of underproduction and concessions of market share to the highest cost producer: the US,' said Joe DeLaura, a former trader and global energy strategist with Rabobank. As a reminder, global oil markets face a supply surplus of 450,000 barrels a day this year even if OPEC+ keeps output flat, as rival supplies – from the US, Brazil, Canada and Guyana – overwhelms growth in consumption, according to the IEA in Paris. * * * Bloomberg is reporting, according to a 'delegate' that OPEC+ will proceed with plans to revive halted oil production after repeated delays, amid pressure from President Donald Trump to lower oil prices. The surprise move – which immediately sent crude prices reeling – means the group led by Saudi Arabia and Russia will go ahead with the increase of 138,000 barrels a day in April (again, according to the delegate). Bloomberg notes that crude traders had widely expected that OPEC+ would once again delay the restart, which it had postponed three times since first announcing a supply roadmap last June. 'The optics around any reinstatement of supply, even if incremental and small, will be seen as price-negative,' Harry Tchilinguirian, head of oil research at Onyx Commodities Ltd., told Bloomberg before the decision. Crude prices immediately plunged back below $70 (WTI) on the headline… ..taking out 2025 lows… It wouldn't be the first time that a headline was run ahead of an OPEC+ meeting to run stops, and we wonder what's the over/under on the timing of an official OPEC+ denial.
