Energy Commentary

Monday, October 01, 2018

Today’s Market News

OPEC vs Trump: Crude markets continue to move higher as some analysts believe it will be possible to see Brent crude at $100 a barrel this year. President Trump is calling for OPEC and Saudi Arabia to raise global production and harness prices. The US would like to see the cartel increase barrels ahead of the crude targeted sanctions that will be handed down to Iran. However, OPEC is telling the US in order to increase production they need to see an increase in demand as they seem unconcerned with lack of production from Iran.

Brent Crude: Brent crude oil has officially hit a four year high as it rose to $83.27. The strength in the market is contributed to upcoming sanctions on Iran and has investors thinking Brent could hit $100 a barrel in the next year. In a sign financial markets are setting up for continued strength, hedge funds increased bullish positions on US crude as well. Hedge funds increased futures and options positions in New York and London by 3,728 contracts to 346,566 contracts the last week of September.

Iran: Iran continues to put up a fight ahead of US crude focused sanctions. Iran announced today they will be offering oil via its Iranian stock exchange. According to the head of the state run National Iranian Oil Company said one million barrels of oil will be offered on the exchange as soon as next week. These barrels will only be available for export.

Market Opinion: Energy headlines and markets are starting the week with a bullish tone. Without a major change from OPEC on increased production or a major change in global demand I would expect energy markets to stay strong.

 

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