Today, bullish turbulence in the speculative surge on oil $65, $70, $75, and now $80. Would the price of a barrel of oil be about to flare up again? In fact, it was the successive announcements of the White House that set fire to the powders. While the price of Brent had fluctuated since the beginning of the year in a narrow band around $ 67 a barrel, a first cap was crossed on April 6 after the announcement of sanctions against Russia: the course is anchored then above 70 dollars. Then it's early May, the announcement of the withdrawal of the United States from the Iran nuclear deal and the 75 dollars is sunk.
The Oil situation
Balance, up 16% since the beginning of the year, prices are at the highest since the end of 2014. To try to determine if we are on the brink of a new explosion three elements are to be taken into account:
1- The fundamentals of the market, that is to say, the confrontation between supply and demand;
2- The geopolitical context
3- Speculation. The fundamentals first. Demand-side, the trend is on the rise.
Excluding the hitch related to the Great Recession of 2008-2009, growth is at a rate of 1.4% per year. And it is not about to stop considering the growing needs of the emerging countries to which is added for 2018 the acceleration of global growth. If the visibility is good on the demand, on the other hand, it is the total blur on the offer.
On the one hand, there is the Oil production curve of the United States: at nearly 11 million barrels/day. It is at its record level and over one year, the increase reaches 1.9 million Oil barrels. That is more than what normally largely offset the additional demand estimated at 1.3 million barrels. Except that we must also integrate the implementation of production quotas decided by OPEC and 10 countries outside the cartel led by Russia. Decided at the end of 2016, the agreement has already been extended twice. It is now running until the end of 2018.
The challenge is to reduce production by 1.8 million barrels a day. And once is not custom, the commitments are generally held, a respect facilitated it is true by the collapse of the Venezuelan production.
US oil point of view
Oil shale American against production quotas of the other, the match is balanced and the world supply has been capping for two years around 81 million barrels per day. In other words, the relationship between Oil supply and demand has shifted in favor of the latter. And it is on this already bullish environment on the prices. That comes to take place a geopolitical context more and tenser, in particular between Iran and the United States. However, this is a country that accounts for 13% of OPEC production and 5.5% of Oil world supply.
Iran had also been exempted from the quota deal because it had just come out of the sanctions regime imposed by the United States and Europe. It had also been heavily involved in supporting the global supply. But we know what it cost to strengthen the sanctions to the oil and petrochemical sectors in Iran in 2015, 1 million barrels/day. The risk is that the Oil world supply becomes very deficient. Even if Saudi Arabia is said to be ready to make an effort and a "reversion clause" was introduced at the request of Russia during the last production agreements.
Nevertheless, the risk still exists. Especially the United States put a nice cacophony in the Middle East and the risks of conflicts increase. The imbalance between Oil supply and demand, geopolitical tensions, it is a good base to relaunch speculation. Goldman Sachs had already judged oil at $ 200 more and more probable. It was in May 2007 and it had fueled rising prices. The impact of financial markets on prices, the famous "futures" is enormous. You must have some key figures in mind.
The volumes of oil traded are 35 times the real market.
Concretely, it means that it exchanged 35 virtual barrels for a real barrel! So it's a flurry when financial markets switch. However, major operators are banking on the rise and it is reported. This is the case of Bank of America which does not exclude a $ 100 the barrel next year. As for Andurand Capital Management, a hedge fund operating on commodities
, it has created a voluntary or involuntary buzz by leaking the prospect of a barrel at $ 300 in a few years.
The assumption of a new outbreak of the price of oil is not yet a certainty. But it must be admitted, it is a hypothesis that has been growing stronger for several weeks.
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