Investing.com – It was a big week in oil, with a brutal hitting $ 65 a barrel and $ 75 a fall sharply from these six-month highs. Donald Trump was the reason for both the rise and the fall, which again proved his ability to surprise the market unexpectedly.
The US President has also tested the intelligence of energy traders by feeding them one of the most ridiculous stories in oil, and at least some have bought a story. Trump opened the week by announcing that he was putting an end to all sanctions for Iranian oil importers. That was a surprise. Then came a ridiculous bit. On Friday, he said he "called" OPEC to lower domestic gasoline prices, which rose by 27% year on year.
It is unclear how many Trump dealers really believed and how many needed an apology for the seven-week rally cash. US pump prices are determined by both fuel demand, stocks and refinery margins, as well as the pipeline provided by both OPEC and local drills. In any case, Trump's story brought a runaway gathering in oil to whistle stop, handing over bulls an unexpected 4% loss per day and a 2% drop per week.
For the record, OPEC Secretary General Mohammed Barkindo later denied having talked to the president.
Also, weekly readings on US oil platforms released on Friday showed a surprising drop in 20 drilling rigs, down to a 13-month low. If anything, it was a testament to Trump's inability to persuade domestic drills to produce a rally that would offset this year's huge reduction in OPEC production.
And the market may not fully awaken to the seriousness of the pollution problem in Russian oil, which has now closed 1.5 million barrels a day in refinery supplies across Europe.
However, Friday's sale signaled that the upward dynamics of oil could at any time frustrate, even with limited restrictions on Iranian oil (explain why below), separate US sanctions against Venezuela, and civil war in Libya. One negative for oil prices is rising
And for those who still believe in Goldman Sachs' forecasts – despite the fact that Wall Street is more bad on commodities today – Brent prices have already reached USD 75 this quarter. This means that the 40% profit this year on oil bulls will be maximized so far and there are other segments in the commodities that could offer a better alpha.
it may be one of these areas, with the Fed expecting to stick to its dovish scenario at the US Central Bank's monthly policy meeting next week. Those who are on yellow metal are looking at a $ 1,300 re-prize, although they are immersed in a strong dollar for most of the past week. The golden mistakes were Friday's revival, which was particularly promising after a sharp quarterly reading of US GDP, which should properly trigger the Wall Street rally.
To repeat this, it was a big week for oil when Trump's cabinet jumped to bring Iran's raw exports to zero and Rouhani's knee administration. Nor would it be, analysts say, pointing out Beijing's plans to continue buying Tehran oil, and Iran's proven legacy of immunity to the dictates of various US presidents.
It is still inconceivable to many analysts that Trump, who needs low oil prices, would strive for a virtual ban on Iranian supply amid continuing global production squeezing by highly determined Saudi Arabia and ongoing blackouts in Venezuela and Libya. A year ago, it seemed that the president was right to comply with some of the "evils" that the Rouhansian regime had made, with the US mid-term elections that had been gone for months. But with the next presidential election that took place until November 2020, and with the grief of Saudi Arabia, who laughed at the prospect of his defender lost in the market, Iraq will finally punish Trump's eyes.
In addition to Trump's controversial "call" to OPEC, this week was even more interesting when the Saudi Energy Minister devoted a thoughtful remark to the president that the US should not count on Britain immediately increasing production to replace lost Iranian barrels. Khalid al-Falih claimed to provide Saudi oil customers with as much inventory as possible. But none would be prevented from doing so as to the idea that the market is short on oil because it just wasn't, he added. It was clever that the Saudis speak for "show us the money and show you the oil". At nearly $ 65 for WTI and $ 75 for Brent, Falih can afford to pull production. And to a certain extent, he was right when the market was adequately supplied, and the California company Orbital Insight, which uses satellite trackers, announced that global oil reserves were up by more than 140 million barrels annually.
Another dark horse for production is the contamination of organic chlorides, which apparently passes through the Russian gas pipeline Druzhba (friendship), which suspended the supply of an estimated 1.5 million barrels a day to European refineries. The Druzhba network is one of the world's largest supplies and supplies refineries in Germany, France and Italy, while linking smaller refineries across South East Europe. Looking for energy writer Alfa Douglas Adams notes that cleaning could take weeks, even months, due to the thousands of miles of pipes that could be involved.
In the Energy Corporate World, Occidental (NYSE 🙂 Offer for Anadarko at $ 76 per Share gave Heartburn rivals Chevron (NYSE 🙂 $ 65 USD. Oxy's offer consisted of half of cash and shares, while Chevron was mostly in stock. And this earlier bid was now even less, about $ 62 a piece, with the drop in Chevron's shares in the past two weeks.
The extraordinarily large construction of 92 billion cubic feet last week and pricing at nearly three-year lows raised the question of whether the fuel is cheap enough for the American industry to switch to coal mines.
Energy calendar ahead
Tuesday, April 30th
weekly report on oil reserves.
Wednesday, May 1st
A weekly report on oil reserves.
Thursday, May 2nd
Weekly EIA Natural Gas Report
Friday, May 3rd
weekly number of sets.
Precious metal reviews
After China's relentless movement and global economic interests, gold started higher last week on the US-Iranian oil front, bringing some old-fashioned geopolitical tensions back to precious metals.
From there it was an uneven route for yellow metal when the US dollar was fine-tuning.
However, by the end of the week, the greenback also stopped running after an overall strong US growth report overshadowed soft inflation data in the first quarter.
The CPI consumer price index, the Federal Reserve's preferred inflation indicator, rose by only 1.3% compared to 1.8% in the previous quarter, CNBC said.
According to a Reuters survey, major central banks are being tightened by policy tightening, as global growth outlook in developed and emerging economies has moderated, with little prospect of a sharp rise in inflation.
The soft global outlook could leave the Fed dove again in its monthly statement on the political session, which will take place on Wednesday, which should mean a revival of gold even if relatively strong US data should be advantageous for the dollar.
While gold fell by more than 4% in February, the recovery of precious metals from a four-month low last week brought a neutral picture of technical charts, said Reuters analyst Wang Tao.
Goldman Sachs said the central bank's gold purchases are also strong, another factor that could boost $ 1,300.
Precious metal calendar ahead
Monday 29 April
Consumer inflation expectations
American Price Index (March)
US Personal Expenses (March)
Tuesday, April 30th
China Manufacturing and Non-Manufacturing PMI (April)
Euro area preliminary GDP (Q1)
Canadian GDP (Q1)
Chicago PMI (April)
Consumer Trust CB (April)
Sold Home Sales (March)
Wednesday, May 1st
UK Manufacturing PMI (April)
ADP wage scales for non-farms (April)
ISM Production (April)
Federal Reserve Decision and Statement
Thursday, May 2nd
China Caixin Manufacturing PMI (April)
Construction in the UK (April)
Bank of England rate decision
Initial claims of the unemployed
Production Orders (March)
Friday, May 3rd
UK PMI Services (April)
Euro area CPI flash estimate (April)
US Invalid Wages (April)
ISM Non-Manufacturing PMI (April)