Listen to the latest market mood for the US oil.
US oil is now entering one of its weakest periods of the year from a seasonal perspective. The losses in US crude oil tends to be large over a seasonal perspective. Will this seasonal pattern come into play for the rest of this month?
Some factors that suggest it might are the fact that Libya has reached full production and Iran may add 500K bpd to supply levels if Biden’s Presidency Is more open to Iran and lifts sanctions. Although a vaccine is in place it will be some time before it is seen to be effective and circulating in major economies. Furthermore, the inventory report last week saw a strong surprise build in the headline figure of over 4 million barrels per day.
On the plus side for oil we have expectations that OPEC+ will delay oil’s output hikes for another 3-6 months.
If the daily trend line on US oil breaks lower, expect sellers as long as price remains below the trend line.
Trade Risks: The main risk to this trade is if the COVID-19 vaccine optimism helps support oil prices higher.