Both Oil benchmarks on both sides of the Atlantic made a sideway move during the last Asian session, but the trend of the Black Gold remains positive, with a slight upside fueled by limited volumes and the US market still closed for the Independence day.
At the time of writing Brent and WTI are traded slightly higher, respectively at $50.62bbl and $49.22bbl extending their consolidation during the European session and after Friday’s strong gains due to robust US ISM manufacturing PMI data and the fade away of the Brexit fears.
Despite everything, during last hours, prices seems to have returned to the bid tone, also
fueled by the slowdown of the US Dollar which seems to have taken a break after the recent gains. (remember that a lower USD price is better for Oil purchases, because it makes it more “cheap” for the foreign investors).
The continuing tensions in Nigeria, moreover, are still limiting the upside of the commodity, after a drop of the production for the African Nation not seen from 30-years, caused by attacks from local militants, the Niger Delta Avengers.
Looking at the Russia, on the other hand, following words from the Energy Minister, the production has grown almost 1% y/y, with the June output on track to increase 1.14%, touching the 10.843 million barrels/day
Christopher Hainer, head of Oil and Gas at BMI Research said:
“If the production will remain stable, this could mean a record year for exports. This mean that the competition is still high, especially from Iran, which is providing Oil to the South Europe.”
Markets are now waiting for the weekly reports from API and EIA on the supply of Oil and the new incentives on the table, while Wednesday’s FOMC could still have an impact, even indirect, on the Black Gold.