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    Oil moves higher on Thursday but what is the driving force

    Yesterday we saw an oversupply in the crude oil inventories of 2.758m barrels against the forecast of 1.695m. This generally would result in a dip in oil price but not today, why?.
     
    As precaution some of the pipelines have also been closed and output will undoubtedly be disrupted by this
     

    The disastrous wildfires at Fort McMurray have forced the city into a state of emergency resulting in the evacuation of the 88,000 residents. Some of the major oil facilities were not in direct risk of the flames but as precaution some of the pipelines have also been closed and output will undoubtedly be disrupted by this. Due to the warm, dry weather and high winds, the flames have been near impossible to control and as of now the city has been evacuated and near 1,600 businesses and homes have been destroyed in its path but fortunately there has been no indication of any casualties.

     

    Other than the tragedy in Canada we are seeing further risk of Libya’s oil production declining. Recently Glencore were prevented from loading their cargo due to the increasing tension between east and western Libya political factions due to the NOC(Eastern faction) is currently blocking tankers from loading and shipping to the Eastern port of Marsa el-Hariga.

    It is still unclear as to what volume the disruption to the pipeline in Canada will cause but whatever the disruptions are, we can see that the closing of the pipelines and the growing risk of further decline in Libiyas oil production, has got traders thinking about the likelihood of an oil supply deficit within the next quarter of 2016.

     

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