Oil Market Maintains Resolutely Bullish Stance

Copyright © 2023 Energy Intelligence Group All rights reserved. Unauthorized access or electronic forwarding, even for internal use, is prohibited.
  • Forward oil curves are showing an unprecedented level of backwardation — nearly $19 per barrel for Brent and $23/bbl for West Texas Intermediate.

  • Several years of underinvestment in fossil fuels have collided with too much stimulus money and prompted persistent price spikes, fueling speculative confidence.

  • Lower hedging levels are drying up market liquidity and increasing volatility.

Pervasive economic uncertainty has done little to dissuade market bulls from surrendering long oil trades. So far the post-pandemic rebound has been met with spare capacity concerns, a decade-long gap in capital expenditure leading to irreversible declines, and too much demand stimulus floating around, the bulls are arguing. Put the green transition into this mix and energy prices can only rise to higher levels, they add.

Oil Futures and Derivatives, Oil Prices, Crude Oil
Wanda Ad #2 (article footer)
The world's largest economy keeps shipping ever more crude and refined fuels abroad, and momentum shows no sign of ebbing.
Fri, Jun 2, 2023
Opec-plus' complex agreement aims to regain control of a market that has been driven recently by sentiment more than fundamentals.
Mon, Jun 5, 2023
With the US debt ceiling talks out of the way and crisis averted, oil markets can now return the focus to supply and demand fundamentals.
Fri, Jun 2, 2023