Oil Prices Fall From Seven Month Highs
Oil prices fell from seven month highs to five week lows in just five trading days as the Iranian threat to global oil supplies has subsided, even as its nuclear deal is on the brink of collapse. Both Brent and WTI prices seem to have found some near-term support at their 200 day moving averages, which seems to be encouraging a bit of bottom fishing buy buyers. We’ll need to wait and see if the early rally can be sustained to know if this move higher is the end of the January sell-off, or just a dead cat bounce.
Read why Reuters Analyst John Kemp thinks prices will hold near current levels for an extended period of time. Or, if you prefer, read why the WSJ suggests an unwind of speculative betting may drive prices lower.
Another interesting read: Why Mexico declared its oil hedging program a state secret.
Today marks the last day of what historically are the sloppiest two weeks of the year for physical markets in the U.S., and already some of the spot & rack markets with the most severe discounts are showing signs of recovery. Several planned refinery turnarounds are starting along the U.S. Gulf Coast over the next two weeks, and that maintenance activity should build through February as plants tool up for the spring.