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Crude oil futures fell for a second straight week, with risk aversion slumping on Friday as global network outages plunged the market and helped lift the dollar.
Concerns about Chinese demand are weighing on markets, ING strategists Warren Patterson and Ewa Manthey said this week’s data showed weak demand conditions, while expectations of market tightness in the third quarter provided a floor for prices. market observation.
Investors may also be eyeing a potential ceasefire in Gaza, with Secretary of State Antony Blinken saying a long-sought deal between Israel and Hamas is within reach.
According to Dow Jones, Morgan Stanley said that “the crude oil market is currently clearly tight with inventory drawdowns, strong spot premiums, and strong spot differentials,” but that “the balance is likely to return to balance in the fourth quarter when seasonal demand tailwinds decrease,” OPEC and non-OPEC supply growth resumed.
Morgan Stanley still predicts that Brent crude oil prices will be around US$80/barrel in the third quarter, and may also reach around US$80/barrel in the fourth quarter after inventories stabilize. However, the bank expects that when supply exceeds demand, the price of Brent crude oil will be around US$80/barrel in 2025. Brent crude oil prices will fall to around $70/barrel.
August Nymex crude oil (CL1:COM) fell 3.2% on Friday, -2.5% This week to $80.13/barrel, front-month September Brent crude oil (CO1:COM) fell 2.9% on Friday and Friday -2.8% This week it reached US$82.63/barrel.
U.S. front-month August natural gas futures (NG1:COM) ends a volatile week -8.6% Prices fell to $2.128/MMBtu due to lower LNG feed gas deliveries and cooler weather forecasts in the near future.
ETF:(New York Stock Exchange: Use), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (NRGU), (USOI), (UNG), (BOIL), (KOLD), (UNL), (FCG)
Traders are also likely to focus on politics, with prospects rising for Donald Trump to win the November presidential election, but “Trump’s oil trade is less clear,” according to Swissquote analyst Ipek Ozkardeskaya. market observation.
Ozkardeskaya said a reflationary environment could keep WTI prices above the key $80/barrel support level in the short term, but it was unlikely to move significantly higher as higher oil prices would push up inflation expectations and potentially reduce easing policy in the United States. bet.
Citi analysts believe that oil fundamentals will become “significantly more bearish” starting in the fourth quarter, with a Trump presidency becoming more likely, raising the possibility of announcing additional tariffs, and “oil trading in tariff headlines” It was very bad in the news”.
Kevin Book of ClearView Energy Partners told Bloomberg that Trump led delegates at the Republican National Convention in loudly calling for the United States to “drill, baby, drill,” but it was unclear whether companies would cooperate.
Trump’s message did not appear to reflect U.S. oil executives’ disinterest in significantly increasing production, but rather fiscal discipline and a focus on shareholder returns.
However, Benjamin Salisbury, research director at Height Capital Markets, said that although Trump cannot lift meaningful restrictions on drilling, the new administration may reconsider electric vehicle incentives and fuel economy standards, thus affecting the demand side.
Energy (XLE), represented by the Energy Select Sector SPDR Fund ETF, was the best-performing sector this week, +2%.
Top 5 Energy & Natural Resources Gainers Over the Past 5 Days: Hawaiian Electric (HE) +67.9%KLX Energy Services (KLXE) +21%New Fortress Energy (NFE) +20.7%Perma-Pipe International (PPIH) +15.8%Long(LGO) +14.5%.
Top 10 losers in energy and natural resources over the past 5 days: Nuscale Power (SMR) -26.3%Nano Nuclear Energy (NNE) -22.8%Light bridge (LTBR) -22.7%ASP isotope (ASPI) -18.4%Plug power supply (PLUG) -18.1%Vistra Energy (VST) -16.2%Indonesian Energy (INDO) -15.5%Energy Fuel(UUUU) -15.1%Calumet Special Products (CLMT) -14.3%Ballard Dynamics (BLDP) -14.2%.
Source: Barchart.com
