Phil Flynn is writer of The Energy Report, a daily market commentary discussing oil, the Middle East, American government, economics, and their effects on the world's energies markets, as well as other commodity markets. Contact Mr. Flynn at (888) 264-5665
It seems the Russia is seeing strong demand for their oil as Asia demand is strong and global inventories are tightening. Reports show that Russia wants to have OPEC Plus raise output by 500,000 barrels a day in February. Believe it or not, we may need that extra oil. Plus breaking reports that an oil refinery in Russia has caught on fire.
Javier Blass at Bloomberg points out that once again the global crude floating storage had another big drop last week at 2 million barrels a day bringing the total quite close to ‘normal’ levels, on @Vortexa data. The global crude oil supply and demand clearly is in a big deficit right now, despite the lockdown according to Blass.
I agree. Crude oil has all the makings of a semi super cycle as demand is coming back strong even as Europe continues on lockdown. U.S. demand will also start to rebound as the Covid vaccines become more available. The massive cuts in spending would suggest that oil producers will not be able to meet demand once the world reclaims 100 million barrel of demand per day. Those that doubt that super cycle prediction point to the U.S. shale patch. They believe that U.S. shale will be able to rise to the occasion and meet any shortfall. They point to a recent uptick in oil rig counts and the prospects for better prices.
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