Founder & CEO. Oil markets macro-analysis., Vanda Insights

Vandana Hari

Founder & CEO. Oil markets macro-analysis.

Vanda Insights

Vanda Insights is a Singapore-based boutique provider of intelligence on the global energy markets, launched in September 2016. The venture was born out of a desire to extract the signal from the noise in the complex and often volatile oil markets. Our succinct and clear macro analysis is relied upon by thousands of readers globally, including those doing business directly or indirectly in the physical commodity and derivatives markets; wealth managers; governments, regulatory bodies and think-tanks; as well as trade organizations and educational institutions.

Global Energy Markets

Commodities

Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. Crude oil can be refined to produce usable products such as gasoline, diesel and various forms of petrochemicals. It is a nonrenewable resource, also known as a fossil fuel, which means that it can't be replaced naturally at the rate we consume it and is therefore a limited resource.

<ul>
<li>Crude price movements have been almost entirely dictated by sentiment in the broader financial markets since around mid-June.</li>
<li>Prices rose in the week to July 29 as part of a broader relief rally in risk assets. The rally is exhausted but may help resist sharp downswings for now.</li>
<li>For the mid-Aug to mid-Sep period, we are mildly bullish. </li>
</ul>


Crude price movements have been almost entirely dictated by sentiment in the broader financial markets since around mid-June.
Prices rose in the week to July 29 as part of a broader relief rally in risk assets. The rally is exhausted but may help resist sharp downswings for now.
For the mid-Aug to mid-Sep period, we are mildly bullish. 


Bulls & Bears: Near-Term and Short-Term View on Oil Prices

<ul>
<li>After four months of rallying under supply-related bullishness, crude has begun to yield downward pressure from recessionary fears.</li>
<li>It is not just sentiment; macro-economic data, including consumer confidence readings, are starting to show weakness.</li>
<li>If Russia continues to successfully reroute its crude being rejected by the EU into Asia, supply concerns will retreat somewhat, bringing the future of demand into sharper focus.</li>
</ul>


After four months of rallying under supply-related bullishness, crude has begun to yield downward pressure from recessionary fears.
It is not just sentiment; macro-economic data, including consumer confidence readings, are starting to show weakness.
If Russia continues to successfully reroute its crude being rejected by the EU into Asia, supply concerns will retreat somewhat, bringing the future of demand into sharper focus.


<ul>
<li>Demand concerns from Covid outbreaks and lockdowns in China have emerged as a challenge to the sustained bullish momentum in oil on account of supply fears.</li>
<li>However, as the Ukraine war festers, the disruption and drop in Russian oil and gas supply may have some more way to go before hitting a peak.</li>
<li>We weigh the near- and short-term key bullish and bearish influences on benchmark crude prices.</li>
</ul>


Demand concerns from Covid outbreaks and lockdowns in China have emerged as a challenge to the sustained bullish momentum in oil on account of supply fears.
However, as the Ukraine war festers, the disruption and drop in Russian oil and gas supply may have some more way to go before hitting a peak.
We weigh the near- and short-term key bullish and bearish influences on benchmark crude prices.


<ul>
<li>The start of Ukraine-Russia peace talks have yanked Brent crude down from 10-year highs of around $128 on March 8 to $108 as of Friday. </li>
<li>But there is a risk premium of at least $18 still embedded in crude prices, which will evaporate only with a rapprochement and ceasefire in the Ukraine war. </li>
<li>In this report, we assess the net impact of the bullish and bearish forces on crude in the very near term and the next couple of months.</li>
</ul>


The start of Ukraine-Russia peace talks have yanked Brent crude down from 10-year highs of around $128 on March 8 to $108 as of Friday. 
But there is a risk premium of at least $18 still embedded in crude prices, which will evaporate only with a rapprochement and ceasefire in the Ukraine war. 
In this report, we assess the net impact of the bullish and bearish forces on crude in the very near term and the next couple of months.


Vanda Insights Bulls & Bears: Near- And Short-Term View on Oil Prices

<ul>
<li>Brent vaulted above the $100 mark early Thursday as Russia pushed troops into eastern Ukraine.</li>
<li>The worst-case scenario for exacerbating oil and gas markets tightness has begun to unfold, which means the rally could go further unless diplomacy is revived.</li>
<li>Mitigating tools and resources -- OPEC+ spare capacity, potential Iran deal, SPR releases -- are severely limited. </li>
</ul>


Brent vaulted above the $100 mark early Thursday as Russia pushed troops into eastern Ukraine.
The worst-case scenario for exacerbating oil and gas markets tightness has begun to unfold, which means the rally could go further unless diplomacy is revived.
Mitigating tools and resources -- OPEC+ spare capacity, potential Iran deal, SPR releases -- are severely limited. 


Quick Views: Crude's Rally on Ukraine Crisis May Have Further to Go