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

It seems these days you simply have to check the risk on/off switch in the financial markets to guess what crude might be doing. For reasons one can only guess, investors last week chose to take reassurance from the comments of Fed officials that current inflationary pressures were transitory and the central bank had started to “talk about talking about” tapering its asset purchases as a cooling measure. The latest US weekly jobless numbers came in at a fresh pandemic low and the Commerce Department confirmed last month’s estimate of a 6.4% annualised US GDP growth in Q1.The EIA weekly US oil stocks and demand data supported the bullish narrative and WTI futures on Thursday catapulted to their highest settle since – take this in slowly – October 2018.Over five consecutive sessions of gains since last Friday, Brent and WTI futures had rallied by a cumulative 7% and 8%. There were no signs of an agreement out of Vienna, where the US and Iran, along with major world powers, have been locked in talks aimed at reviving the 2015 nuclear deal. The realisation that a deal – and fresh Iranian barrels flooding the market -- may not be imminent took the lid off prices.But this doesn’t mean crude is poised for a bull run. We look at the downside risks including the ghost of inflation, Covid’s lingering grip over parts of the world, and China tightening oversight of trading and pricing in the domestic oil and metals markets in a bid to curb inflationary pressures.

It seems these days you simply have to check the risk on/off switch in the financial markets to guess what crude might be doing. For reasons one can only guess, investors last week chose to take reassurance from the comments of Fed officials that current inflationary pressures were transitory and the central bank had started to “talk about talking about” tapering its asset purchases as a cooling measure. The latest US weekly jobless numbers came in at a fresh pandemic low and the Commerce Department confirmed last month’s estimate of a 6.4% annualised US GDP growth in Q1.The EIA weekly US oil stocks and demand data supported the bullish narrative and WTI futures on Thursday catapulted to their highest settle since – take this in slowly – October 2018.Over five consecutive sessions of gains since last Friday, Brent and WTI futures had rallied by a cumulative 7% and 8%. There were no signs of an agreement out of Vienna, where the US and Iran, along with major world powers, have been locked in talks aimed at reviving the 2015 nuclear deal. The realisation that a deal – and fresh Iranian barrels flooding the market -- may not be imminent took the lid off prices.But this doesn’t mean crude is poised for a bull run. We look at the downside risks including the ghost of inflation, Covid’s lingering grip over parts of the world, and China tightening oversight of trading and pricing in the domestic oil and metals markets in a bid to curb inflationary pressures. 

Weekly Oil Views: US Cheer Spurs Fresh Crude Rally but Downside Risks Lurk

Brent tried to vault above the $70 psychological mark and failed again last Monday. By the end of the week, those levels looked way out of reach.A perfect storm made of risk aversion in the broader financial markets, Covid’s lingering grip on India and parts of Asia, and reports of the US and Iran progressing towards reviving the 2015 nuclear deal, yanked crude down by a cumulative 6% between Tuesday and Thursday.While the first two factors are likely to continue posing headwinds for crude, we think the bearishness on expectations of a new wave of Iranian oil supply lashing the markets soon may be premature. We tell you why and lay out our expectations for the possible scenarios on Iran.

Brent tried to vault above the $70 psychological mark and failed again last Monday. By the end of the week, those levels looked way out of reach.A perfect storm made of risk aversion in the broader financial markets, Covid’s lingering grip on India and parts of Asia, and reports of the US and Iran progressing towards reviving the 2015 nuclear deal, yanked crude down by a cumulative 6% between Tuesday and Thursday.While the first two factors are likely to continue posing headwinds for crude, we think the bearishness on expectations of a new wave of Iranian oil supply lashing the markets soon may be premature. We tell you why and lay out our expectations for the possible scenarios on Iran.

Weekly Oil Views: Iran Deal Sell-Off May Be Premature

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

Metals and commodities plays have rallied nicely but show signs of a tactical exhaustive top and somewhat crowded positioning. A shakeout is in store as the USD finds a foot but is already in rally mode to a larger degree in Asia and bottoming in EM.WTI and platinum have broken key wedge supports and copper will pullback to macro trendline support.A risk off cycle combined with a USD bounce would inflect metals.

Metals and commodities plays have rallied nicely but show signs of a tactical exhaustive top and somewhat crowded positioning. A shakeout is in store as the USD finds a foot but is already in rally mode to a larger degree in Asia and bottoming in EM.WTI and platinum have broken key wedge supports and copper will pullback to macro trendline support.A risk off cycle combined with a USD bounce would inflect metals. 

Let’s set aside the unpredictability of the pandemic’s trajectory for a minute. Even the current global map of Covid is getting harder to read!On the one hand, you have the US, which is marching towards a full reopening, even with a daily case count of more than 30,000. On the other, there are countries in Asia intent on pursuing “Covid zero” – a complete elimination of the virus. The progression of the pandemic and the progress of immunisations also look like a patchwork across the globe. In the meantime, the constantly evolving mutants, carrying threats of higher transmissibility or resistance to immunity, have become a new source of concern, just as the spread of vaccines was starting to offer hope.All these moving parts make assessing global oil demand recovery harder than usual. The popular narrative is an expected strong rebound in the second-half of the year, marked by a nearly 5 million b/d jump in global consumption on average compared with the first half. But the downside risk to that H2 optimism is stacked high. The second half of 2021 may indeed look better with a gradual spread of vaccinations and continued reopening of economies, but we are not convinced on the quantum of improvement.

Let’s set aside the unpredictability of the pandemic’s trajectory for a minute. Even the current global map of Covid is getting harder to read!On the one hand, you have the US, which is marching towards a full reopening, even with a daily case count of more than 30,000. On the other, there are countries in Asia intent on pursuing “Covid zero” – a complete elimination of the virus. The progression of the pandemic and the progress of immunisations also look like a patchwork across the globe. In the meantime, the constantly evolving mutants, carrying threats of higher transmissibility or resistance to immunity, have become a new source of concern, just as the spread of vaccines was starting to offer hope.All these moving parts make assessing global oil demand recovery harder than usual. The popular narrative is an expected strong rebound in the second-half of the year, marked by a nearly 5 million b/d jump in global consumption on average compared with the first half. But the downside risk to that H2 optimism is stacked high. The second half of 2021 may indeed look better with a gradual spread of vaccinations and continued reopening of economies, but we are not convinced on the quantum of improvement.

Weekly Oil Views: Crude Hemmed in by Demand Uncertainty, Spectre of Inflation

Amid a sense of heightening frustration and desperation over a festering virus around the globe more than a year into the pandemic, the US racing towards normalcy and European countries making plans to end restrictions for summer holiday travel is uplifting news.It prompts hope that the rest of the world, which may not be as fortunate right now, will follow suit.Crude has been rallying again with an eye on a summer demand boom.While on a personal level we prefer to think positive and stay optimistic, with an analyst’s hat on, we see the risk of a resurgence of the virus on either side of the Atlantic as borders are reopened and people allowed to mingle in the coming months.The unprecedented spike in infections triggered by new mutants of the SARS-CoV-2 not only in India, but also parts of Southeast Asia, Japan and Canada, could be a story that gets replayed in the US and Europe. Neither the US nor the EU countries will be anywhere close to “herd immunity” by summer.Not only that, but the US is abandoning the goal of herd immunity. We give you our take on the significance of this crucial development and the alternate to the dream of a “Covid-free” vaccinated world that we – and the oil market – needs to be prepared for.

Amid a sense of heightening frustration and desperation over a festering virus around the globe more than a year into the pandemic, the US racing towards normalcy and European countries making plans to end restrictions for summer holiday travel is uplifting news.It prompts hope that the rest of the world, which may not be as fortunate right now, will follow suit.Crude has been rallying again with an eye on a summer demand boom.While on a personal level we prefer to think positive and stay optimistic, with an analyst’s hat on, we see the risk of a resurgence of the virus on either side of the Atlantic as borders are reopened and people allowed to mingle in the coming months.The unprecedented spike in infections triggered by new mutants of the SARS-CoV-2 not only in India, but also parts of Southeast Asia, Japan and Canada, could be a story that gets replayed in the US and Europe. Neither the US nor the EU countries will be anywhere close to “herd immunity” by summer.Not only that, but the US is abandoning the goal of herd immunity. We give you our take on the significance of this crucial development and the alternate to the dream of a “Covid-free” vaccinated world that we – and the oil market – needs to be prepared for.

Weekly Oil Views: Promise of Summer Demand Boom Obscures Attendant Risk

United States

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.

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Weekly Oil Views: US Cheer Spurs Fresh Crude Rally but Downside Risks Lurk

Crude hit two-year highs last week as broader risk appetite returned, the latest US macro data came in strong and the prospect of a US-Iran deal...

Vandana Hari

Weekly Oil Views: Iran Deal Sell-Off May Be Premature

Persistent and growing inflation jitters in the broader financial markets remain a headwind for crude but an additional bout of sell-off last week...

Vandana Hari

Crowded Commodities the Next Domino

Metals and commodities show signs of a tactical exhaustive top and somewhat crowded positioning. A shakeout is in store. A risk off cycle combined...

Thomas Schroeder

Weekly Oil Views: Crude Hemmed in by Demand Uncertainty, Spectre of Inflation

After Apr's doldrums, May has returned buoyancy to oil. But Brent has failed to breach $70. The virus and its variants are continuing to spread. An...

Vandana Hari

Weekly Oil Views: Promise of Summer Demand Boom Obscures Attendant Risk

The US is racing towards full "normalisation" while European countries are readying for a bustling summer holiday season. None have reached "herd...

Vandana Hari

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