1. Home
  2. Live Market Analysis
  3. Crude Oil - Traders fear Supply Shortages
Crude Oil - Traders fear Supply Shortages
30.06.2022

Crude Oil - Traders fear Supply Shortages

Yesterday the price of oil originally saw a strong increase in value taking the price up to $112.59 by the afternoon. The price was the highest we have seen in 2 weeks but momentum collapsed after the release of the latest oil inventories. After hitting the 2-week high the price declined by 3.55% and is currently hovering at $108.67

The price has crossed below yesterday’s low price and is also lower than Tuesday's price wave. However, the price has now moved into a sideways trend with little volatility and direction. This is most likely caused by traders waiting for further clarity after such a strong price movement. Currently, the price is ranging between $107.73 and $109.07.

30.06.2022.jpg

The market’s attention is mainly fixed on the political aspect between the G7 countries and Russia. During a meeting between members over the past couple of days, it was decided to review different ways in which these countries can forcibly limit prices for Russian oil. However, this can potentially increase investors' fears of an additional shortage in the energy market. Traders fear the move will further pressure supply as the action taken by the west can have many repercussions.

Yesterday officials from Russia already advised that the country will not trade their commodities at a loss under any condition, even if it results in hurting the economy further. Therefore any attempts to forcibly limit prices may lead to Russia's refusal to supply oil to the G7 countries. This is a possibility as Russia is able to redirect exports to Asia and African countries. This would be a dangerous move by the west as there is nothing to replace Russian energy carriers. It was previously believed that the west could simply buy increased supply from Saudi Arabia and the UAE. However, according to experts, these two regions will only be able to increase production by a maximum of 150,000 barrels per day. The figure is not even close to covering the demand.

In addition to the above, the price was also influenced by the Oil inventories which were released yesterday afternoon. This week the Oil Inventories were much lower than expected by the market. The inventory was expected to be confirmed as -900,000 barrels but was announced as -2,800,000 barrels. The lower level of supply pairs with supply fears and could potentially support prices, however, traders are still cautiously looking at yesterday’s decline.

The market will now turn its attention to the OPEC meeting this afternoon. The meeting is scheduled in order to discuss a range of issues regarding energy markets and, most importantly, agree on how much oil they will produce based on the market demand and their capabilities. Traders will be scrutinising any comments made by the OPEC representatives.

IMPORTANT NOTICE: Any news, opinions, research, analyses, prices or other information contained in this article are provided as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and therefore, it is not subject to any prohibition on dealing ahead of dissemination. Past performance is not an indication of possible future performance. Any action you take upon the information in this article is strictly at your own risk, and we will not be liable for any losses and damages in connection with the use of this article.
RISK WARNING: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. A high percentage of retail client investors lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Copyright © 2022 – All rights reserved.

NAGA is a trademark of The NAGA Group AG, a German based FinTech company publicly listed on the Frankfurt Stock Exchange | WKN: A161NR | ISIN: DE000A161NR7.

Any trademarks appearing on this website are the property of their respective owners.

The NAGA Group AG is the holding company of various companies, such as NAGA GLOBAL LLC, NAGA MARKETS EUROPE LTD, NAGA Technology GmbH, NAGA Pay GmbH and has a close link with NAGAX Europe OÜ.

RISK WARNING: Derivatives are complex instruments and come with a high risk of losing money rapidly due to leverage. A high percentage of retail investor accounts lose money when trading derivatives with this provider. You should consider whether you understand how derivatives work and whether you can afford to take the high risk of losing your money.

Trading with NAGA Trader by following and/or copying or replicating the trades of other traders involves high levels of risks, even when following and/or copying or replicating the top-performing traders. Such risks include the risk that you may be following/copying the trading decisions of possibly inexperienced/unprofessional traders, or traders whose ultimate purpose or intention, or financial status may differ from yours. Before making an investment decision, you should rely on your own assessment of the person making the trading decisions and the terms of all the legal documentation.

Restricted countries: NAGA Group AG does not provide services for the residents of certain countries, such as Afghanistan, Albania, American Samoa, Australia, Barbados, Belgium, British Virgin Islands, Burkina Faso, Cambodia, Canada (including Quebec), Cayman Islands, Central African Republic, Congo, Democratic People's Republic of Korea, Democratic Republic of the Congo, Gibraltar, Guam, Haiti, Iran, Iraq, Isle of Man, Israel, Jamaica, Jordan, Libyan Arab Jamahiriya, Mali, Monaco, Morocco, Myanmar, Nicaragua, Philippines, Russian Federation, San Marino, Senegal, Serbia, Somalia, South Sudan, Sri Lanka, Syrian Arab Republic, Trinidad and Tobago, Tunisia, Turkey, Uganda, Ukraine, United Kingdom, US Minor Islands, US Virgin Islands, USA, Vanuatu, Yemen, Zimbabwe.

Member of NAGA Group AG that is publicly listed in Frankfurt Stock Exchange.
close icon
By using this website, you agree to our cookie policy