Crude Oil: Between Slowing Demand and Shrinking Supply

Crude Oil: Between Slowing Demand and Shrinking Supply

Coronavirus in China, fights in Ukraine, sanctions against Russia – what else could raise concerns about oil supply in an already tense market?

An economic slowdown in China, which appears to have adopted a “zero-tolerance” epidemic policy, was weighing on oil prices as the country’s COVID case count rose.

Lockdown that has locked 25 million people in their homes

Finally, some restrictions in Shanghai are being eased in certain neighborhoods following growing dissatisfaction with the very strict lockdown that has locked 25 million people in their homes. That lockdown has caused food shortages and forced thousands of citizens into isolation in specialized centers, consequently causing a food delivery surge and staff shortages.

Related article: ECB To Shock Markets In The Following Week!? US Dollar Rate Under Pressure As Well!

7 million barrels a day of Russian exports, supposed to be lost due to sanctions, could not be fully replaced

In Ukraine, fears of fighting, which could intensify in the eastern region (around the Donbas), are also stirring the markets. Meanwhile, OPEC Secretary General HE Mohammad Sanusi Barkindo warned the European Union on Monday that the 7 million barrels a day of Russian exports, supposed to be lost due to sanctions, could not be fully replaced, reports the financial press.

Such concerns may again raise fears about the supply of black gold in an already tight market. It was added that the current and future sanctions on Russia could create one of the worst oil supply shocks ever and it would be impossible to replace those volumes, as OPEC signaled it would not pump more.

WTI Crude Oil (CLK22) Futures (May contract, daily chart)

WTI Crude Oil (CLK22) Futures (May contract, daily chart)

Henry Hub Natural Gas (NGK22) Futures (May contract, daily chart)
Henry Hub Natural Gas (NGK22) Futures (May contract, daily chart)

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Thank you.

Sebastien Bischeri
Oil & Gas Trading Strategist

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The information above represents analyses and opinions of Sebastien Bischeri, & Sunshine Profits' associates only. As such, it may prove wrong and be subject to change without notice. At the time of writing, we base our opinions and analyses on facts and data sourced from respective essays and their authors. Although formed on top of careful research and reputably accurate sources, Sebastien Bischeri and his associates cannot guarantee the reported data's accuracy and thoroughness. The opinions published above neither recommend nor offer any securities transaction. Mr. Bischeri is not a Registered Securities Advisor. By reading Sebastien Bischeri’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Sebastien Bischeri, Sunshine Profits' employees, affiliates as well as their family members may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Sebastian Bischeri

Sebastian Bischeri

Sebastien Bischeri is a former Reserve Officer in the French Armed Forces (Navy), and began his career in computer science and engineering, prior to move into banking, finance, and trading. He has worked as a contractor with top banks, firms, government departments, MNCs, SMEs and start-ups over the past decade, where he’s gained extensive knowledge of commodities, economic intelligence, energy, financial markets, investments, risks, and strategy (both as a Trader and Analyst). In parallel, Mr. Bischeri never stopped learning: he holds an MSc in Oil & Gas Finance and Energy Economics from Dundee, Scotland, and a European Masters in Economic Intelligence (EI) from Versailles, France.