Oil investors were served a rather weak EIA report today. The US is not experiencing any severe oil shortage at all, but the key factor is that US gasoline prices are rising sharply. In some states, prices are approaching $ 4 per gallon, which has been a clear problem for consumers in the past. For this reason, the American authorities are calling on OPEC countries to increase their oil production. According to government experts, the restoration of production at the level of 400k barrels per day should not lead to a significant increase in prices.
This is quite an important signal for investors, although at the same time it seems that such exhortations will be of little use at the moment. In particular, Asia is experiencing a significant decline in oil imports, and yet this region is the key market for OPEC - not the United States. Therefore, this seems to be a moderately bullish signal for oil.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appAt the same time, such signals from the US also show that price increases may be limited in the long-term. When prices reach too high a level, there may be intensification of pressure on OPEC, a change in the attitude regarding production in the US, or finally acceleration of work regarding the removal of sanctions from Iran.
Brent retreated slightly from recent highs, but still remains close to $ 70 a barrel. Source: xStation5
