The plummeting oil in July contradicts the Iranian offer

Brent recorded its largest monthly decline since 2016, dropping 6.5 percent in July to less than $ 75 a barrel after Opec and Russia moved to increase production and rally of fresh oil

Compared with the norms of the last two years, the decline in oil prices shows that the market is suddenly well stocked after more than 18 months of declining stocks, one of the main reasons for which producers increased their production in June. Starting in November, Iran's gross exports will be reduced by the reimposition of US sanctions, creating a market facing a period of oversupply in the short term as rivals rush to form a reserve of stocks before what could be "The increase in Russian production and Opep to compensate Iran well before it's disconnected took everyone off guard", has Amrita Sen told Energy Aspects. "[But] the loss of Iranian oil can really tighten the global market."

The split can be seen in the so-called curve forward for Brent. The short – term excess supply pushed the immediate delivery contracts to a lower level than the expected delivery later in the year, a clbadic sign of a flooded market of crude oil.

Brent for delivery in September, which expires on Tuesday barrel while the December contract was trading at $ 74.81 a barrel

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This market structure, known as contango, also makes it less profitable for funds to hold oil contracts as an investment, which has contributed to a speculative exit But the worst of the sale by funds seems to be over, traders being concerned about the supply situation later in the year.

JBC Energy badysts said that the crude market "send a lot of conflicting signals" because the impact of the sudden increase in barrels of Saudi Arabia and other Gulf exporters earlier this summer was still absorbed.

While these countries added The other members of OPEC who were struggling to maintain their production – contributing to the rise of oil to nearly 80 dollars a barrel at the end of June – continue to struggle

"After a sharp rise in crude oil flows, the main exporters in the Gulf slowed down a bit, while the combined Iranian, Libyan and Venezuelan flows are at their lowest level since January," badysts said. from JBC. "Overall, it actually leaves us more or less in the same place we were in April."

Other risks for the oil supply were also highlighted. Saudi Arabia has prevented several cargo ships from crossing the Bab el-Mandeb Strait at the southern end of the Red Sea after one of its tankers was targeted by Houthi rebels in Yemen. last week.

Over the past two days, oil company Kpler has pushed back the southern coast of Oman, delaying deliveries to Europe and Egypt. It is unclear whether they are waiting for a lifting of the embargo or a military escort across the strait.

"It seems that the head of OPEC is doing a plethora of hijackings," Kpler badysts said. 19659019] [ad_2]
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