Global Oil Market has a lot of issues - Sept 6

[dan_s]

From Bloomberg today:

Two factors are primarily driving the price of oil. On the one hand, recession
worries and expectations regarding global oil consumption are tending to
depress the price. On the other, concerns about geopolitical conflicts are
exerting upward pressure, and have the potential to cause an explosion in
global energy prices.

Brent Crude is currently struggling around the 80 dollars per barrel mark. At
the beginning of the month, it had temporarily fallen below 77 dollars. Then
better-than-expected figures on US retail sales, and falling inflation,
dampened fears of a recession, causing the price of Brent to climb temporarily
to over 82 dollars.

At present, the economic data from the USA, and the key indicators for the oil
market, do not provide a clear picture. In addition to the retail trade data,
the number of new applications for US unemployment benefits recently also
tended to argue against the USA slipping into recession. On the other hand,
much of the data from the consumer and manufacturing sectors suggests economic
weakness. However, services account for around 70% of gross domestic product
in the already largely de-industrialised USA.

In China, the economy has proved to be a disappointment following the end of
the pandemic measures. Europe and Germany, in particular, are suffering from
accelerating de-industrialisation as a result of misguided energy policies and
sanctions against Russia. Both the International Energy Agency and Opec
economists have recently revised their forecasts for global demand for oil
slightly downwards. The Opec analysts explicitly point to the weak overall
demand from China as the reason why they have lowered their forecast for Brent
by 5 dollars to 85 dollars by the end of the year.

Geopolitical deadlock

As far as geopolitical events in the Middle East are concerned, we can also
speak of a kind of impasse, as there are both plenty of indications of an
intensifying confrontation, but also signs that, according to many market
participants, speak in favour of an inevitable easing of tensions.

For example, the Israeli assassination attempt on Hamas leader Haniyeh in
Tehran on the day of the inauguration of the new President Massud Peseshkian
can be seen as a provocation, as is the visit by Israeli Security Minister
Itamar Ben Gvir with more than 1,000 radical Jewish settlers to the Temple
Mount in Jerusalem, one of the most important Islamic shrines. In addition,
according to calculations by Acled, an organisation specialising in conflict
research, Israel has killed at least 39 high-ranking commanders of Iran and
the Shiite Lebanese militia Hezbollah in a campaign, and the war in the Gaza
Strip continues with exorbitantly high civilian casualties. Although there are
currently new talks about a ceasefire, Hamas is not taking part due to the
killing of Haniyeh, who was also Hamas' chief negotiator.

Meanwhile, according to a report in the Times of Israel, the Israeli
government is even considering a pre-emptive strike against Iran if there are
clear indications that Iran is preparing an attack. Such a move would mean
open war between Israel and Iran, which would, in all likelihood, also involve
the USA, which has amassed more military assets in the region than it has for
many years. These include an aircraft carrier with escort ships, a nuclear
submarine equipped with cruise missiles, ground troops and F-22 stealth
fighter jets.

On the other hand, Iran's promised counter-strike has so far failed to
materialise, even though Western media have announced it several times in good
time, citing alleged sources within the Iranian government. This has already
been interpreted in the West and Israel as an indication that Iran could
renounce the counter-strike. However, this is extremely unlikely, especially
as Iranian religious leader Ayatollah Ali Khamenei recently declared in a
speech and on the social network X that a military, political or economic
retreat that was more than just tactical would bring the wrath of God.

No retaliation yet

It, therefore, seems almost inevitable that there will be a military response
from Iran. However, the Iranian government is choosing the time and place for
this, and preparations are already underway. According to data from the
FlightRadar24 website, there is a veritable air bridge between Russia and Iran
with transport aircraft from the Russian air force, whereby it is generally
assumed that state-of-the-art Russian air defence and electronic warfare
systems are being supplied. The Israeli government, in turn, had declared that
it would react disproportionately in the event of an Iranian attack.

Only recently, a high-ranking commander of the Iranian Revolutionary Guards
held out the prospect of closing the Strait of Hormuz, whose deep-water area
suitable for shipping runs through Iranian territorial waters, in the event of
a war with Israel. Around 25% of the world's crude oil and around 30% of the
world's liquefied natural gas (LNG) is transported by ship through the Strait
of Hormuz. A closure of this vital transport artery would inevitably lead to
an explosion in the price of crude oil and natural gas.

It is generally doubted that the USA could succeed in keeping the Strait of
Hormuz open given the military strength Iran has now achieved – especially as
the USA and the UK are currently unable to stop the increasing attacks by
Yemen's Houthi rebels on merchant ships in the Red Sea. Meanwhile, Iranian oil
production has now returned to a level last seen in 2018. Despite the
sanctions, Iran has also managed to find new buyers, most recently Oman and
Bangladesh, according to the Reuters news agency. Last month, Iranian Oil
Minister Javad Owji said that Iran was now exporting its oil to 17 countries,
Iranian news agency Mehr reported. In July, Iranian oil production reached
3.22 million barrels per day (bpd), which compares with a historic high of
around 4 million bpd. This is the highest level in six years. Meanwhile, the
Iranian economy is booming. In March, economic growth totalled 5.7%. Excluding
the oil sector, the figure was still 3.4%.

[aja57]

This is what the mindcraft media want you to believe in front of their curtain. Reuters is just as bad. I'm oil enough to remember the impact of geopolitical issues of war causing major energy dislocations and price explosions. Now days the media demands that you look at blowing up ships at strategic energy routes and blowing up nat gas pipelines as normalized behavior. Right now on the charts there is no technical support for oil prices.Just what the globalist governments and paper traders ordered. Next couple months are going to be so ugly. Get prepared for economic,political,and social upheaval.

[aja57]

https://x.com/SheDrills/status/1832158257881702854