Leak of US Crude Oil Inventories Buildup And OPEC Meeting to Keep the Price Bearish
There’s a tough battle going on in crude Oil from $90 until $105, as traders are uncertain which direction Oil will end up. The establishment wants Oil higher in order to push the public toward the green agenda, while the opposite side and the consumers want Oil cheaper.
The OPEC meeting is today and yesterday crude Oil already showed agitation yesterday ahead of the meeting, even though OPEC is not expected to raise production. Even if they do, it will not be by much. The Saudi Crown Prince is not for such a quick transition to electrical cars, as he has mentioned before.
Besides that, today we have the US crude Oil inventories for last week being released and the official expectations are for a 1.4 million barrels draw. But a leak from a private survey published via Zero Hedge tweet showed a buildup last week.
This comes at a bad time for crude Oil, when the sentiment is negative. On another note, the G7 continues to signal it will pursue Russia’s Oil-price cap. Although Russian Oil and energy exports have been diverted mainly to China but also to India, so there’s not much the EU can do.
Crude Oil Daily Chart – The 200 SMA Acting As Support
Sellers failing to break the 200 SMA
Statement from the G7
- We continue to explore further measures to prevent Russia from profiting from its war of aggression
- Looking at a comprehensive prohibition of all services that enable transportation of Russian seaborne oil and petroleum products globally, unless purchased at or below a price to be agreed in consultation with international partners
- We will consider mitigation to make sure vulnerable countries can maintain access to energy markets
If this policy goes into place, it will inevitably take Russian oil off the market just after SPR releases end in October. US Treasury Secretary Janet Yellen also commented on this issue:
“Russia’s going to face an insurance and financial services ban at the end of the year that is going to end up shutting in between 3 and 5 million barrels, we estimate,” she said. “So why should they retaliate for an initiative that enables their oil to continue to flow through to world markets at a price that is still profitable?”
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