Oil is struggling today on demand worries but supply will be the story next year.
The latest numbers from the EIA peg US output rising 500,000 barrels per day this year versus 540,000 bpd previously. That would put output at 11.75 mbpd.
For 2023 they now see production rising 610k bpd versus 840k bpd previously (and 1.05m in June). That’s a total of 270K bpd less in 2023 and I still think risks are to the downside.
On the demand side, they see 20k bpd more demand growth this year but cut 2023 demand growth by 490k. So much of the latter hinges on what China does with zero covid.
In any case, the oil market is down today with WTI crude oil
Crude Oil
Crude oil is the most popular tradable instrument in the energy sector, offering exposure to global market conditions, geopolitical risk, and economics. The instrument is strategically relied upon and situated in the global economy. Crude oil has proven to be a unique option for traders given volatility and the efficacy of both swing trading and longer-term strategies. Despite its popularity, crude oil is a very complex investing instrument, given the litany of fluctuations in oil prices, risk, and impact of politics stemming from OPEC. Short for the Organization of the Petroleum Exporting Countries, OPEC operates as an intergovernmental organization of 13 countries, helping set and dictate the global oil market.How to Trade Crude Oil Crude oil is most commonly traded as an exchange-traded fund (ETF) or through other instruments with exposure to it. This includes energy stocks, the USD/CAD, and other investing options. Crude oil itself is traded across a duality of markets, including the West Texas Intermediate Crude (WTI) and Brent crude. Brent is the more relied upon index in recent years, while WTI is more heavily traded across futures trading at the time of writing. Other than geopolitical events or decisions by OPEC, crude oil can move due to a variety of different ways. The most basic is through simple supply and demand, which is affected by global output. Increased industrial output, economic prosperity, and other factors all play a role in crude prices. By extension, recessions, lockdowns, or other stifling factors can also influence crude prices. For example, an oversupply or mitigated demand due to the aforementioned factors would result in lower crude prices. This is due to traders selling crude oil futures or other instruments. Should demand rise or production plateau, traders will bid increasingly on crude, whereby driving prices up.
Crude oil is the most popular tradable instrument in the energy sector, offering exposure to global market conditions, geopolitical risk, and economics. The instrument is strategically relied upon and situated in the global economy. Crude oil has proven to be a unique option for traders given volatility and the efficacy of both swing trading and longer-term strategies. Despite its popularity, crude oil is a very complex investing instrument, given the litany of fluctuations in oil prices, risk, and impact of politics stemming from OPEC. Short for the Organization of the Petroleum Exporting Countries, OPEC operates as an intergovernmental organization of 13 countries, helping set and dictate the global oil market.How to Trade Crude Oil Crude oil is most commonly traded as an exchange-traded fund (ETF) or through other instruments with exposure to it. This includes energy stocks, the USD/CAD, and other investing options. Crude oil itself is traded across a duality of markets, including the West Texas Intermediate Crude (WTI) and Brent crude. Brent is the more relied upon index in recent years, while WTI is more heavily traded across futures trading at the time of writing. Other than geopolitical events or decisions by OPEC, crude oil can move due to a variety of different ways. The most basic is through simple supply and demand, which is affected by global output. Increased industrial output, economic prosperity, and other factors all play a role in crude prices. By extension, recessions, lockdowns, or other stifling factors can also influence crude prices. For example, an oversupply or mitigated demand due to the aforementioned factors would result in lower crude prices. This is due to traders selling crude oil futures or other instruments. Should demand rise or production plateau, traders will bid increasingly on crude, whereby driving prices up. Read this Term down $3 to $86.51.
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This text was written byComply withJames Catlin holds levels in Economics and Political Science. He has been actively investing for almost 25 years and is presently the lead economist at Worth Investor's Edge....
