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

The bullish narrative of the world being on the cusp of controlling Covid had been overshadowed by Europe’s renewed Covid woes between mid-March and mid-April. Last week, it stormed back centre-stage and propped Brent and WTI futures to one-month highs.A string of upbeat US macro-economic data for March and was reinforced by a jump in the country’s weekly fuel sales. OPEC, the US Energy Information Administration as well the International Energy Agency synchronously upgraded their 2021 global oil demand forecasts, adding to the gathering upward momentum.The problem with the rally is that the unbridled optimism is based on a blinkered view. The pandemic is far from over. The latest 7-day average of global count of new daily cases stands above 736,000, almost on par with the all-time-high hit around January 11. A handful of more transmissible coronavirus mutants are triggering fresh outbreaks. Some  may be deadlier while others may be able to evade antibodies and thus render the current jabs ineffective.  Vaccination drives continue to suffer setbacks.So, what now? Crude has overshot to the upside and will need to reconcile by replacing the rosy US portrait with a very mixed and uncertain global picture.

The bullish narrative of the world being on the cusp of controlling Covid had been overshadowed by Europe’s renewed Covid woes between mid-March and mid-April. Last week, it stormed back centre-stage and propped Brent and WTI futures to one-month highs.A string of upbeat US macro-economic data for March and was reinforced by a jump in the country’s weekly fuel sales. OPEC, the US Energy Information Administration as well the International Energy Agency synchronously upgraded their 2021 global oil demand forecasts, adding to the gathering upward momentum.The problem with the rally is that the unbridled optimism is based on a blinkered view. The pandemic is far from over. The latest 7-day average of global count of new daily cases stands above 736,000, almost on par with the all-time-high hit around January 11. A handful of more transmissible coronavirus mutants are triggering fresh outbreaks. Some  may be deadlier while others may be able to evade antibodies and thus render the current jabs ineffective.  Vaccination drives continue to suffer setbacks.So, what now? Crude has overshot to the upside and will need to reconcile by replacing the rosy US portrait with a very mixed and uncertain global picture.

Weekly Oil Views: Crude Overshoots in Rebound to One-Month Highs

We said in our Bulls &amp; Bears report last week that crude's 3-4% higher settle on April 1 was incongruous with OPEC+'s decision earlier in the day to ramp up supply by about 2 million b/d over May-July, that prices would pull back and become range-bound in the low-$60s for Brent for the very near term. That is exactly what transpired.What next? Equal and opposite forces working on oil market sentiment -- major among them signs of the US economy picking up steam while Europe remains in the Covid doldrums and fresh hotspots emerge across Asia -- have left crude price in a limbo.When they break out of the current range, it is more likely to be upwards rather than downwards. The latest OPEC+ decision was a dampener but we believe the alliance, and especially Saudi Arabia with its recently-introduced unilateral output cuts, will walk back some of the planned supply boosts if they see crude remaining under downward pressure.Also in this report, our take on the implications of the US and Iran launching "indirect" talks last week to revive the 2015 nuclear deal.

We said in our Bulls &amp; Bears report last week that crude's 3-4% higher settle on April 1 was incongruous with OPEC+'s decision earlier in the day to ramp up supply by about 2 million b/d over May-July, that prices would pull back and become range-bound in the low-$60s for Brent for the very near term. That is exactly what transpired.What next? Equal and opposite forces working on oil market sentiment -- major among them signs of the US economy picking up steam while Europe remains in the Covid doldrums and fresh hotspots emerge across Asia -- have left crude price in a limbo.When they break out of the current range, it is more likely to be upwards rather than downwards. The latest OPEC+ decision was a dampener but we believe the alliance, and especially Saudi Arabia with its recently-introduced unilateral output cuts, will walk back some of the planned supply boosts if they see crude remaining under downward pressure.Also in this report, our take on the implications of the US and Iran launching "indirect" talks last week to revive the 2015 nuclear deal.

Weekly Oil Views: Sentiment Caught in a Time and Geographic Deadlock

Founder & Chief Market Strategist - SAV Markets, SAV Markets

Shyam Devani

Founder & Chief Market Strategist - SAV Markets

Cross Asset Strategy

The price or yield action on US 10 year Treasury is now beginning to reveal a loss of momentum and indicate at least a consolidation if not lower yields in the short term.A move below 1.58% would be particularly telling.What this, and the developing price action on Oil, tells us about equities is up for interpretation – though from our stand point the bias is to remain cautious on equities as we settle into the new month and quarter.

The price or yield action on US 10 year Treasury is now beginning to reveal a loss of momentum and indicate at least a consolidation if not lower yields in the short term.A move below 1.58% would be particularly telling.What this, and the developing price action on Oil, tells us about equities is up for interpretation – though from our stand point the bias is to remain cautious on equities as we settle into the new month and quarter.

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Last week we noted some deterioration in market dynamics, all while reiterating our overall constructive outlook looking weeks and months ahead. The fact is, “perfectly bullish” conditions rarely exist, and a weight of the evidence approach is necessary. To that end, the positives continue to outweigh the negatives and our outlook remains constructive.

Last week we noted some deterioration in market dynamics, all while reiterating our overall constructive outlook looking weeks and months ahead. The fact is, “perfectly bullish” conditions rarely exist, and a weight of the evidence approach is necessary. To that end, the positives continue to outweigh the negatives and our outlook remains constructive.

Energy ministers of the OPEC/non-OPEC alliance and Saudi Arabia once again surprised the market with their decision on April 1 to put more oil back into the market over May-July.Given the latest bout of oil demand worries on account of a third wave of Covid in Europe and daily cases measured on a global level on an upward trek once again, OPEC+ and Saudi Arabia had been widely expected to extend their collective and additional unilateral production cuts respectively at least through May.The latest deal also flew in the face of OPEC's own downgrade earlier in the week of global oil demand recovery through the second quarter. The decision had compromise written all over it --  it may have been the only way to get a consensus and maintain cohesion in the 23-member group that was persuaded by Saudi Arabia to keep a lid on output from February through April.Counter-intuitively, crude futures closed 3-4% higher on Thursday, following the OPEC+ decision. Taking the latest OPEC+ moves into account and weighing the other major influences on oil market sentiment, our latest monthly Bulls &amp; Bears report gives you our view of how prices are likely to move over the next several days and the next three months.

Energy ministers of the OPEC/non-OPEC alliance and Saudi Arabia once again surprised the market with their decision on April 1 to put more oil back into the market over May-July.Given the latest bout of oil demand worries on account of a third wave of Covid in Europe and daily cases measured on a global level on an upward trek once again, OPEC+ and Saudi Arabia had been widely expected to extend their collective and additional unilateral production cuts respectively at least through May.The latest deal also flew in the face of OPEC's own downgrade earlier in the week of global oil demand recovery through the second quarter. The decision had compromise written all over it --  it may have been the only way to get a consensus and maintain cohesion in the 23-member group that was persuaded by Saudi Arabia to keep a lid on output from February through April.Counter-intuitively, crude futures closed 3-4% higher on Thursday, following the OPEC+ decision. Taking the latest OPEC+ moves into account and weighing the other major influences on oil market sentiment, our latest monthly Bulls &amp; Bears report gives you our view of how prices are likely to move over the next several days and the next three months.

Bulls & Bears: Short- And Medium-Term View on Oil Prices

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: Crude Overshoots in Rebound to One-Month Highs

Crude snapped out of a pessimistic limbo last week to jump to one-month highs, but with a blinkered view. US growth is not a panacea and Covid woes...

Vandana Hari

Weekly Oil Views: Sentiment Caught in a Time and Geographic Deadlock

Crude is caught in a limbo, between diverging economic fortunes across the Atlantic and a tussle between future optimism and present pragmatism....

Vandana Hari

US 10 Year Yield – What to Watch

A more cautionary short term picture is beginning to unfold indicating lower US 10 year yield which raises questions for other markets including US...

Shyam Devani

Breakaway Gaps In Place

Market dynamics are not perfect, but the fact is that “perfectly bullish” conditions rarely exist. The positives continue to outweigh the negatives...

Vermilion Research

Bulls & Bears: Short- And Medium-Term View on Oil Prices

OPEC+ on Apr 1 decided to boost oil supply over May-Jul. Given a resurgent Covid, we see crude prices under pressure over the next several weeks...

Vandana Hari

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