2024-07-04 10:15:00 ET
Summary
- Inventory changes have been firmly in the bearish camp for both total crude oil and petroleum products, as well as crude oil itself for much of the past few months.
- Gasoline stocks in particular have been replenished at a higher-than-normal rate over the past quarter, along with overall petroleum and crude inventories.
- Even if fundamentals are bullish, there remains a $85-90 ceiling on oil prices in 2024, given the election and the US production story is unlikely to be a major factor for 2024.
Inventory draws need to continue for this oil rally to have legs
Back in May, as oil prices corrected from the high $80s to mid $70s, the energy sector provided a terrific buying opportunity for both long term energy bulls and oil traders alike. Sentiment and positioning had been washed out on fears OPEC+ would increase production and unwind their voluntary cuts, all at a time where demand was set to rise and inventories draw as we entered peak demand season in the Northern Hemisphere....
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For further details see:
Energy: Shifting From Bullish To Neutral