ECRG Intelligence 8/22: The Next Saudi Move
ECRG Intelligence, August 22, 2016
Full Story Here: http://energycapitalresearchgroup.com/ecrg-intelligence/the-next-saudi-move/ .
Through the close of trade on Friday (August 19), crude oil had recovered almost all of what it had lost over the past several weeks and was approaching multi-month highs. West Texas Intermediate (WTI, the benchmark crude rate for futures contracts set in New York) had risen for the seventh consecutive trading session. Over that period (beginning on August 11), WTI improved 16.3% and stood at $48.52 a barrel.
A similar rise was recorded in Brent (set daily in London, the other – and more globally used –
benchmark for cruse sales). Brent closed on Friday above $50 a barrel (at $50.72), up 15.5% since August 11’s close.
The spikes in price are overblown and will experience retrenchment in short order. Still, there were some reasons why the advance took place.
An oversold market was one reason, while the drawdowns in U.S. surpluses were another. Yet the approaching end of the American primary driving season (traditionally put at Labor Day, or September 5 this year) on the one hand and the semi-annual switch in refinery emphasis (this time from gasoline to heating oil) combined with refurbishment of facilities on the other normally would result in a lower demand for crude.
The continuing rise in oil prices, therefore, would seem to indicate something else was going on. And there was.
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