Crude oil expected to surge

 

Market update for Crude Oil:

Sun 14.April: As Iran retaliated the attacks performed by Israel on an Iranian embassy in Syria 1st of April the middle-east region is further destabilised with this historic event. The sides that were partners for decades ended their alliance during the 80s and have been hostile since 1991. This night´s events elevate the hostility to new levels as the two sides are on the brink on erupting in an open war. The world is now watching and waiting for Israel's response which is stated to come. 

WTI crude oil has rallied further in price since the escalating events. The May futures was at 87.67$ per barrel at peak before closing at 85.66$ /bbl on Friday according to data from CME Group. The US then reported it expected retaliation. Morningstar published an article with sources quoting a potential crude oil price above 100$/bbl if Iran were to attack Israel. This attack is now a reality and we expect a significant surge in the WTI crude price when the markets open tomorrow morning Monday 15.April.

WTI Crude Oil price development from October 2023. Source CME Group.

US Crude oil Inventories has continued to increase since February, apart from two weeks of minor

withdrawal in mid-march. Thus the short-term price increase is in our view attributed primarily to regional and global increase in price risk rather than significant change in economic development. This indicator continues, in isolation, to indicate economic slow-down which is as expected considering the high, and potentially further increasing, interest environment. 

US Crude oil storage, charge%. Source: Investing.com

Natural Gas

The May futures for Natural gas Henry Hub is trading at 1.770$/mmbtu on closure Friday 12.April 2024 according to data from CME Group. This is close to its all-time low that occurred back in February. From an Energy. Entering into the summer season we may observe a brief seasonal upturn as countries on the northern hemisphere start preparations for a new winter season. 

Lets see what the Monday morning brings when trading resumes!