Crude oil quickly resumed upward momentum, although until recently the price was near $100.00 per barrel. Brent currently trades above $ 115 and is up 1.5% today. The expiring contract trades above $120.00, which indicates that the physical market is very tight.
An OPEC meeting was held today, but no decision was made as Saudi Arabia is waiting for Biden's arrival. Some analysts expect that this visit may lead to production increases. However, the market is concerned that the OPEC countries will not be able to significantly increase production. In the past Saudi Arabia only twice managed to keep production above 11 mbd, while the UAE produced more than the August target of 3.17 mbd only 5 times in history.
In addition, China is easing its covid restrictions, which suggests a possible higher oil demand and economic recovery, at least during the summer season. It is worth mentioning that the DOE double report will be published today, as last week's data has not been presented due to technical problems. Therefore, at 3:30 pm BST one can expect an increase in price volatility.
Brent above $ 115. Price is still below recent highs, but the oil market is very tight, as evidenced by backwardation and a very low number of open positions on contracts. Source: xStation5
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