ConocoPhillips CEO mentioned bodily oil markets are usually not displaying indicators of the oversupply many merchants concern, suggesting a possible disconnect between market sentiment and precise fundamentals.
Talking about international crude flows, he famous that floating inventories aren’t rising, and there’s no important enhance in medium-sour crude arriving on the U.S. Gulf Coast—a sample that may usually seem if producers had giant volumes of spare capability.
“You have a look at the bodily market, and also you don’t see that taking part in itself out,” he mentioned, warning that “there may very well be a collision coming” between bearish expectations and tighter underlying provide.
The CEO added that whereas buyers are looking forward to indicators of a provide glut, ConocoPhillips sees little proof of 1. “Quite a lot of the OPEC+ will increase had been paper barrels—they had been already available in the market,” he mentioned, questioning when or if market bearishness will materialize.
—
The feedback counsel fundamentals might assist greater oil costs than futures indicate, reinforcing a near-term bullish case for crude. An absence of seen stock builds may stress quick positions if knowledge proceed to contradict bearish sentiment.
ps. I will go away it as much as readers to resolve if he could also be speaking his e book.
—
Additionally, different trade gamers take an reverse view:
- Gunvor: mentioned that whereas discuss of an oil market oversupply has circulated earlier than — usually proving flawed — this time the narrative seems to have extra credibility given present market circumstances.
- Trafigura: famous that merchants have been conscious of an impending surplus for a couple of yr, including that costs are prone to fall farther from present ranges.
