Around The Barrel – Crude Oil and Gasoline Outlook as Global Recession Looms

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    WTI crude oil settles at $109.52 Up $1.53
    The high price $111.16. The low price $106.82.
    July contract went off the board today settling at $110.58 up $1.02 or 0.93%

    Brent Crude Futures 114.89 0.24 0.21%
    Crude Oil Futures 110.58 1.02 0.93%
    Heating Oil Futures 4.2498 0.0185 0.44%
    Natural Gas Futures 6.802 -0.006 -0.09%
    Unleaded Gasoline Futures 3.8176 0.0231 0.61%


    WTI crude #oil futures settle at $106.19 and below the 100 dma down $3.33 or -3.04%
    The high $109.76. The low $101.53.


    Macron overheard at G7 talking with Bidenvia Reuters

    “I had a call with MbZ,” he said, referring to the de facto Saudi leader. “I’m at a maximum, maximum (production capacity). This is what he claims.”

    “And then he said (the) Saudis can increase by 150 (thousand barrels per day). Maybe a little bit more, but they don’t have huge capacities before six months time,” he said.

    Officially Saudi Arabia is producing 10.5 mbpd and has 12-12.5 mbpd of capacity. The UAE is producing at 3 mbpd and has capacity for 3.4 mbpd.


    Venezuela’s state company PDVSA has suspended gasoline production at the country’s second largest refinery due to an outage at its reformer, five sources with knowledge of the operations said on Wednesday.


    Ecuador says its #oil output may stop completely in 48 hours
    Ecuador’s Oriente crude exports suspended, Napo flowing amid force majeure via Reuters


    RBC sees ‘the strongest fundamental oil market set up in decades, maybe ever’

    n a note to clients on Wednesday led by global energy strategist Michael Tran, RBC called for the price of North American benchmark West Texas Intermediate (WTI) (CL=F)​​ crude to average US$114 per barrel next year. That’s up from the bank’s forecast of US$96.50 in mid-February.

    WTI fell 2.01 per cent to US$109 at 3:24 p.m. ET on Wednesday.

    “Recession or not, we believe that the oil complex remains in a structural, multi-year tightening cycle that will go as far as demand will take it,” Tran and his team wrote. “Absent a recession, the tightening cycle clearly points higher, potentially significantly higher. US$150/bbl, US$175/bbl, US$200/bbl? Pick a number.”

    Tran says the supply-side of the oil price equation has been largely de-risked by recent events.

    “The supply-side shock absorbers have been removed from the market,” he wrote, referring to factors such as low global inventories, and a lack of spare capacity from OPEC and North American producers. “This is important given that supply-side catalysts have torpedoed the majority of the oil market rallies of the past decade.”

    However, Tran says a “deteriorating macro backdrop and the looming threat of a recession” have left the demand outlook potentially the most clouded since the Great Financial Crisis.

    “Assuming all remains on track, we could certainly envision a scenario in which spot benchmark prices test $150/bbl or higher on a protracted basis over the next 18 months. The high conviction view is a function of structurally tight inventories, not hanging our hats on potentially flimsy demand,” he wrote.

    “Given recessionary scenarios in which demand is taxed at a similar rate as previous downturns, we could see a scenario in which prices retreat into the mid US$70/bbl range in the back half of this year,” he added.

    Tran says this is not part of the bank’s base-case scenario, and places a 15 per cent probability on such an event.

    Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.


    WTI Oil prices tumbled after July 4 over $10 and 8% to under $100 bbl. Crude was the last commodity to crack lower on global recession fears. Gasoline
    [See the full post at: Around The Barrel – Crude Oil and Gasoline Outlook as Global Recession Looms]

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