BlackMask Breaking News

Oil markets will continue to tighten in the second and third quarters amid growing supply risks including the rollover of voluntary supply cuts from OPEC+ into  Q2 2024, Ukraine’s recent attacks on Russia’s refineries as well as constant disruptions to oil flows through the Red Sea, ING Global Market Research has predicted. ING Global has hiked its oil price forecast from US$80/bbl to US$87/bbl for the second quarter and from US$82/bbl to US$88/bbl for the third quarter.Two days ago, J.P. Morgan reported that the attacks have sent 900K barrels of Russian refinery capacity offline and could add a risk premium of $4/bbl to oil price while StoneX energy analyst Alex Hodes has predicted that the attacks on Russian refineries could potentially cut ~350K bbl/day of global petroleum supplies and boost oil prices by $3/bbl. Meanwhile, ING Global has predicted that interest rate cuts by the Fed are likely to lead to an increase in speculative interest in the oil futures market. According to ING, long positions have increased significantly in the current year compared to the previous year from around 100k lots to a little over 230k lots currently. ING, however, has pointed out that positioning remains fairly modest compared to pre-2022 levels despite the unfolding risks hanging over the markets. ING says it’s possible that OPEC’s large spare capacity is making speculators worry that oil prices have limited upside.  Several other analysts share a similar sentiment. Standard Chartered, on the other hand, says OPEC+ has ample room to maneuver without upsetting the balance in oil markets. According to StanChart,  a 0.9 mb/d increase in output by OPEC in the third quarter would still leave the global market with an inventory draw of 0.5 mb/d for the quarter on top of the 1 mb/d draw across H1-2024. The analysts reckon that OPEC can hike Q3 output by as much as 1.5 mb/d Q/Q without increasing inventories. NN: As   you can see you can find any opinion you want.

 

Israeli Strategic Affairs Minister Ron Dermer (pictured) insisted on Thursday that his country’s army will continue its operation in the Gazan city of Rafah until it claims it despite the United States’s opposition to that .Speaking on the Call Me Back podcast, Dermer stressed the importance of capturing Rafah as it shelters a quarter of Hamas’s members. He added that Israel is willing to learn the US’s stance on the matter but that the operation must be concluded even if an agreement on evacuating civilians from there is not reached. The minister’s comments came a day ahead of US Secretary of State Antony Blinken’s visit to Israel.

Federal Reserve officials maintained their outlook for three interest-rate cuts this year and moved toward slowing the pace of reducing their bond holdings, suggesting they aren’t alarmed by a recent uptick in inflation.Officials decided unanimously to leave the benchmark federal funds rate in a range of 5.25% to 5.5%, the highest since 2001, for a fifth straight meeting. Policymakers signaled they remain on track to cut rates this year for the first time since March 2020, but they now see just three reductions in 2025, down from four forecast in December, based on the median projection. Chair Jerome Powell, speaking to reporters after the Fed’s decision Wednesday, demurred when asked whether officials would lower rates at their coming meetings in May or June, repeating that the first reduction would likely be “at some point this year.”

He largely shrugged off recent data showing an uptick in inflation in recent months, saying, “It is still likely in most people’s view that we will achieve that confidence and there will be rate cuts.”

At the same time, he said the data supported the Fed’s cautious approach to the first rate cut, and added that policymakers are still looking for more evidence that inflation is headed toward their 2% goal. Powell also said it would be appropriate to slow the pace of the Fed’s balance-sheet unwind “fairly soon,” after policymakers held a discussion on their asset portfolio this week.“The decision to slow the pace of runoff does not mean our balance sheet will shrink, but allows us to approach that ultimate level more gradually,” he said. “In particular, slowing the pace of runoff will help ensure a smooth transition, reducing the possibility of money markets experiencing stress.” The Fed’s post-meeting statement was nearly identical to January’s, maintaining the guidance that rate cuts won’t be appropriate until officials have more confidence inflation is moving sustainably toward their 2% target.The Federal Open Market Committee also reiterated its intention to continue reducing its balance sheet by as much as $95 billion per month. Some officials, including Dallas Fed President Lorie Logan, have called for an eventual slowing of the pace at which the Fed is shrinking its portfolio of assets .

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• StoneX: Ukraine’s recent attacks on Russian refineries could potentially cut ~350K bbl/day of global petroleum supplies and boost U.S. crude prices by $3/bbl.
• Standard Chartered: energy markets kicked off the new year with an overly pessimistic view of oil demand.
• Standard Chartered: global demand will hit a new all-time high of 103.01 mb/d in May.

Crude oil futures have rallied close to a five-month high with concerns about tightening supplies driving up prices in recent days, only coming down to earth on Wednesday and paring some of those gains while awaiting an interest rate signal from the U.S. Federal Reserve.    According to StoneX energy analyst Alex Hodes, Ukraine’s recent attacks on Russian refineries could potentially cut ~350K bbl/day of global petroleum supplies and boost U.S. crude prices by $3/bbl. Analysts at J.P. Morgan estimates that 900K barrels of Russian refinery capacity have gone offline after the attacks, adding a risk premium of $4/bbl to oil prices. Brent futures have extended their year-to-date gain to nearly $10 per barrel. That figure is 0.25 mb/d higher than StanChart’s latest forecast, a development that has prompted the analysts to revise their 2024 demand growth forecast to 1.69 mb/d from 1.64 mb/d previously. The analysts have also predicted we are going to see a sustained period of inventory draws in H1-2024, with the cumulative draw during the first half of the year coming in at 185 mb compared with a H1-2023 build of 230 mb. StanChart says demand indications remain robust, and have predicted that global demand will hit a new all-time high of 103.01 mb/d in May, a record which will be broken in June and again in August when demand is expected to clock in at 103.62 mb/d and 104.31 mb/d, respectively.  StanChart has predicted that tightening oil markets will continue to power the oil price rally and has reiterated its long-held forecast for Brent to average $94/bbl in Q2-2024.

StanChart has predicted that oil markets will continue to be supply-constrained for the better part of the year. The analysts see limited growth for U.S. crude production, with U.S. supply not likely to move significantly higher than November 2023’s all-time high of 13.319 mb/d. Meanwhile, Russia will continue to struggle to optimize its upstream and downstream oil system, with logistical constraints due to  war damage as well as a lack of critical spare parts contributing to a negative outlook for Russian crude and refined products output. More importantly, StanChart sees OPEC+ having ample room to maneuver starting in the third quarter. The analysts have pointed out that a 0.9 mb/d increase in OPEC output in the third quarter would still lead to an inventory draw of 0.5 mb/d for the quarter on top of the 1 mb/d draw across H1-2024. Indeed, OPEC has room to increase Q3 output by as much as 1.5 mb/d Q/Q without increasing inventories. The Energy Information Administration (EIA) is the most bearish of the leading energy agencies; however, using its model, OPEC could increase output by 0.8 mb/d Q/Q without triggering an inventory build. StanChart notes that Q3 crude balances are such that OPEC could significantly increase crude output without depressing prices or negatively affecting inventories.

The Israel Defense Forces (IDF) ordered all the civilians currently located at the Al-Shifa Medical Complex in Gaza City to evacuate to avoid going through an air attack, Al Jazeera reported on Thursday. The outlet added that, given the bombing tactics implemented in the hospital and nearby zones, the IDF is seeking to demolish the center completely.Meanwhile, the IDF added it killed more than 140 members of Hamas who were hiding at the hospital. It also claimed it found caches of weapons and different military equipment there.

Israel claims it seized $3M in Al-Shifa hospital raids

The Israeli Defense Forces (IDF) announced on Wednesday that it has confiscated cash amounting to $3 million in United States dollars and Jordanian dinars during their operations at Al-Shifa Hospital in Gaza City.The army mentioned that it had successfully evacuated approximately 3,700 Palestinian civilians from the hospital, who were then transported to southern Gaza. During the operation, a total of 300 suspects were apprehended, including senior Hamas and Islamic Jihad commanders. Earlier reports indicated that Israel has rejected the latest ceasefire proposal put forward by Hamas. Furthermore, a representative from Hamas stated yesterday that the IDF’s raids on the medical facility have disrupted ongoing peace negotiations. NN: Things are heating up. I expect  things to get really bloody and then a peace  deal will come. You can expect some wild swings in oil.

The Israel Defense Forces (IDF) stated on Wednesday its troops killed about 90 members of Hamas who were allegedly using Al- Hospital in Gaza City as their shelter. “Over the past day, the troops have eliminated terrorists and located weapons in the hospital area, while preventing harm to civilians, patients, medical teams, and medical equipment,” the IDF claimed in its statement. The IDF added that the Military Intelligence Directorate and the Shin Bet interrogated more than 300 people found at the hospital and took more than 160 to Israel for further questioning. Meanwhile, Hamas’s Ismail Haniyeh urged Israel to abandon the hospital, saying its actions are damaging the prospects of a new ceasefire.

Crude oil inventories in the United States fell this week by 1.519 million barrels for the week ending March 15, according to The American Petroleum Institute (API), after analysts had predicted a 77,000 barrel build. The API reported a large 5.521-million-barrel rise in crude inventories in the week prior. On Tuesday, the Department of Energy (DoE) reported that crude oil inventories in the Strategic Petroleum Reserve (SPR) rose by 0.7 million barrels as of March 8. Inventories are now at 362.3 million barrels.Oil prices were up ahead of the API data release on Tuesday as the market continues to digest and assess Ukraine’s attacks on Russian refineries. Gasoline inventories also fell this week. Gasoline inventories fell 1.574 million barrels, after falling by 3.750 million barrels in the week prior. As of last week, gasoline inventories were about 3% below the five-year average for this time of year, according to the latest EIA data.Distillate inventories rose this week, by 512,000 barrels, after last week’s 1.162 million barrel drop. Distillates were already 7% below the five-year average for the week ending March 8, the latest EIA data shows.Cushing inventories also rose this week, gaining 325,000 barrels after falling by 998,000 barrels in the previous week. NN: The data point are very confusing. Which is why you seeing these kinds of moves.

Hamas’ senior political leader, Ismail Haniyeh (pictured), accused Israel of disrupting the peace talks following their attack on Al-Shifa, the largest hospital in Gaza.”The deliberate targeting of police officers and government officials in Gaza illustrates their efforts to sow chaos and perpetuate violence among our resilient people. This also reveals the occupation leaders’ endeavor to sabotage ongoing negotiations in Doha,” he posted on Telegram on Tuesday.The Israeli Defense Forces previously claimed that they had apprehended more than 300 individuals with connections to Hamas. Negotiations for a ceasefire in Gaza and the release of hostages were underway in Doha, Qatar indicated that a counter-proposal could be presented to Hamas in the near future. NN:  Its about the famine and the threatened invasion.

Crude oil prices were set for a weekly gain of about 4% after the International Energy Agency became the latest forecaster to suggest oil demand might turn out to be stronger than previously expected this year. The IEA said Thursday that it now expects oil demand this year to grow by 1.3 million bpd, up from 1.2 million bpd last month. The agency cited maritime transport disruptions due to the Houthi attacks in the Red Sea that are adding demand for fuel. The IEA also revised its supply forecast, but downwards. It now expects additional supply this year at 800,000 bpd. As a result, the forecast, which last month said the oil market would be in surplus, now says it will face a deficit later in the year.  The agency noted, however, that lukewarm economic growth would continue to act as a headwind for prices even as other agencies such as the IMF revised their global GDP growth outlook upwards. A series of fresh drone attacks by Ukraine on Russian refineries also contributed to the price rally this week, especially after the energy ministry said these attacks had led to a 1.5% decline in fuel exports in February. There were drone attacks on refineries in Russia last month as well. The latest weekly inventory figures from the United States were also bullish for prices, featuring sizeable drawdowns in fuel inventories that suggested stronger demand. As a result of the rally, which brought Brent crude to over $85 per barrel on Thursday, traders started taking profits, eventually bringing prices lower. Even so, the international benchmark was trading above $85 per barrel in midmorning trade in Asia today. NN: No i have not been sleeping. This is a complicated market with  incredible volume of AI fake news. Remember today is option roll over. So the gang is making sure their options expire in the money. I am putting together for a the longest trade recommendation i have ever written.