Energy Report: Real And Imagined

Oil prices are recovering from Eater Monday’s huge selloff that was caused by reasons that were in some cases real and other cases imagined. Light volume as Europe understands how to really celebrate a holiday caused the light volume to take the oil market on a bearish ride. Concerns about increasing covid cases in India as well as the Biden administration's fixation with reentering the flawed 2015 Iranian nuclear accord, had traders worried about a massive flood of crude hitting global markets at a time when they believed covid shutdown would again zap demand. How much of this is real and how much is imagined.

Well, Iran is already squirting U.S. sanctions with no fear of reprisals from the Biden administration. Iran has something Biden wants and they know if they play their cards right they can cut another great deal.  Maybe another drop-off of cash at an airport in the middle of the night like Obama did. Then they can perfect their ballistic missiles so when the nuclear ban under the accord ends, they know they can deliver their payload with pinpoint accuracy. Iran laughs off oil sanctions as Iran exports have surged since Biden has taken office. In March Iranian exports hit 1.0 million barrels a day yet the oil trade still worries that we will see oil tanks as it did in 2015 when Obama lifted sanctions on the terrorist nation. Yet oil traders are imagining that this is 2015 and it isn’t. The oil market can handle more Iranian oil as demand is rising and inventories are tightening.

Petrol, Gasoline, Diesel, Gas, Automotive, Prices, Oil

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In fact, in a sign that Saudi Arabia is not fretting about the move, they raised their selling price for oil to Asia. This angered many buyers especially India who has been a vocal critic of the OPEC cartel.

Yet rising cases of covid in India is an oil demand concern. India refiners are buying less oil but is it because of rising covid cases or a political slap at Saudi Arabia? Reuters News reported that "Indian state refiners will buy 36% less oil from Saudi Arabia in May than normal, three sources said, in a sign of escalating tensions with Riyadh even after the Kingdom supported the idea of boosting output from OPEC and allied producers last week. Energy relations between India, the world’s third-biggest oil importer, and consumer, and Saudi Arabia have soured as global oil prices spiked. New Delhi blames cuts by the Saudis and other oil producers for driving up crude prices as its economy tries to recover from the pandemic. State-run refiners have placed orders to buy 9.5 million barrels of Saudi oil in May, compared with the previously planned 10.8 million barrels, three sources said. The refiners - Indian Oil Corp, Bharat Petroleum Corp, Hindustan Petroleum Corp, and Mangalore Refinery and Petrochemicals Ltd - normally buy 14.8 million barrels of Saudi oil a month."

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