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.

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The 22-member OPEC/non-OPEC alliance of oil producers decided to raise supply by 500,000 b/d from January in a somewhat surprise decision, reached after a week of fractious meetings, on Thursday.It also made a provision for a gradual release of more oil into the market based on monthly reviews, starting with the February supply policy.The market had widely expected OPEC+ to maintain its 7.7 million b/d of production cuts at least through Q1 2020 to avoid the risk of tipping the market into oversupply as fresh waves of the coronavirus in the Western hemisphere are expected to dampen demand through the winter months.We examine the OPEC+ decision in five sections: The agreement, The Compromise, The Winners and Losers, The Market Reaction, and The Fault Lines and Trouble Spots.

The 22-member OPEC/non-OPEC alliance of oil producers decided to raise supply by 500,000 b/d from January in a somewhat surprise decision, reached after a week of fractious meetings, on Thursday.It also made a provision for a gradual release of more oil into the market based on monthly reviews, starting with the February supply policy.The market had widely expected OPEC+ to maintain its 7.7 million b/d of production cuts at least through Q1 2020 to avoid the risk of tipping the market into oversupply as fresh waves of the coronavirus in the Western hemisphere are expected to dampen demand through the winter months.We examine the OPEC+ decision in five sections: The agreement, The Compromise, The Winners and Losers, The Market Reaction, and The Fault Lines and Trouble Spots.

OPEC+ Sets Stage for a Tumultuous Start to 2021 in Oil Markets

The OPEC/non-OPEC alliance's surprise decision on Thursday to add 500,000 b/d of supply to the market starting in January was principally a compromise deal designed to hold together a 22-member coalition that is showing signs of fatigue and major cracks.The roadmap of tweaking supply policy on a monthly basis beyond January injects a new layer of complexity to the decision-making process, not to mention making it harder for members to maintain discipline or for the market to keep track of it.Crude has staged a relief rally on the latest OPEC+ decision because the more bearish potential outcomes of a 1.9 million b/d supply boost from January or even a collapse of the alliance were averted. It is hard to see continued momentum in it.

The OPEC/non-OPEC alliance's surprise decision on Thursday to add 500,000 b/d of supply to the market starting in January was principally a compromise deal designed to hold together a 22-member coalition that is showing signs of fatigue and major cracks.The roadmap of tweaking supply policy on a monthly basis beyond January injects a new layer of complexity to the decision-making process, not to mention making it harder for members to maintain discipline or for the market to keep track of it.Crude has staged a relief rally on the latest OPEC+ decision because the more bearish potential outcomes of a 1.9 million b/d supply boost from January or even a collapse of the alliance were averted. It is hard to see continued momentum in it.

OPEC+ Compromise on Q1 Oil Supply Portends Heightened Price Volatility

Three Covid vaccine success stories catapulted crude to nearly nine-month highs on Wednesday, but the rally was losing steam by the end of the week. 
Covid infections, hospitalisations and deaths were hitting new highs in the US. Though the numbers were levelling off in Europe under strict lockdowns, the fresh waves have battered consumer confidence on either side of the Atlantic.  
If year-end holidays worsen the pandemic, oil demand as well as sentiment may take a hit.
We wouldn't worry about speculation that the latest surge in crude prices or fresh internal rumblings might derail the OPEC/non-OPEC alliance from staying the course on its production cuts when energy ministers meet early next week. We expect a cautious and patient approach to prevail, with an extension to the end of Q1 2021 at least. 
But that may not provide much fillip to crude prices, as the decision is all but baked in.

Three Covid vaccine success stories catapulted crude to nearly nine-month highs on Wednesday, but the rally was losing steam by the end of the week. 
Covid infections, hospitalisations and deaths were hitting new highs in the US. Though the numbers were levelling off in Europe under strict lockdowns, the fresh waves have battered consumer confidence on either side of the Atlantic.  
If year-end holidays worsen the pandemic, oil demand as well as sentiment may take a hit.
We wouldn't worry about speculation that the latest surge in crude prices or fresh internal rumblings might derail the OPEC/non-OPEC alliance from staying the course on its production cuts when energy ministers meet early next week. We expect a cautious and patient approach to prevail, with an extension to the end of Q1 2021 at least. 
But that may not provide much fillip to crude prices, as the decision is all but baked in.

Weekly Oil Views: Crude Jumps 30% on Vaccine Cheer but Not Immune to Pullback

A flurry of highly encouraging results from late-stage trials of Covid vaccines over the past fortnight sparked off a euphoric rally in risk assets and lifted crude prices to two-and-a-half-month highs.Unfortunately, the “finish line” for vaccine development is the starting point of a long, arduous journey to immunising a substantial proportion of the 7.8 billion people across the globe.Stock markets are fully pricing in an expected recovery in corporate revenues and profits. But the oil complex has to balance future optimism with the current physical markets, which may soon be teetering on the brink of oversupply.OPEC+ last week again signalled a willingness to forego its 1.9 million b/d supply boost scheduled for January 2021 but appeared to leave the door open for other options. Options it doesn't really have, unless it is willing to see Brent slipping below the $40 threshold.

A flurry of highly encouraging results from late-stage trials of Covid vaccines over the past fortnight sparked off a euphoric rally in risk assets and lifted crude prices to two-and-a-half-month highs.Unfortunately, the “finish line” for vaccine development is the starting point of a long, arduous journey to immunising a substantial proportion of the 7.8 billion people across the globe.Stock markets are fully pricing in an expected recovery in corporate revenues and profits. But the oil complex has to balance future optimism with the current physical markets, which may soon be teetering on the brink of oversupply.OPEC+ last week again signalled a willingness to forego its 1.9 million b/d supply boost scheduled for January 2021 but appeared to leave the door open for other options. Options it doesn't really have, unless it is willing to see Brent slipping below the $40 threshold.

Weekly Oil Views: Brent Eyes $45 on Vaccine Hope but Can't Ignore Current Realities

Crude took a few serious knocks in the US election week, mostly as uncertainty over the outcome grew, including raising the spectre of worst-case scenarios of a drawn-out political chaos and violence on the streets.
But news of Joe Biden's electoral win on Saturday had calmed the markets and shored up sentiment in the oil complex on Monday. Though President Donald Trump has not yet conceded, it may be only a matter of time; his legal challenges are not expected to reverse the outcome. 
We take a look at how a Biden administration may impact the oil sector at home and overseas. On balance, it is neither clearly bullish nor bearish and may take a while to play out. So, don't rush in with any bets yet.
Meanwhile, with the distraction of US elections (mostly) over, the oil market will return to a focus on fundamentals, which continue to look weak. But the OPEC/non-OPEC alliance may have a trick up its sleeve.

Crude took a few serious knocks in the US election week, mostly as uncertainty over the outcome grew, including raising the spectre of worst-case scenarios of a drawn-out political chaos and violence on the streets.
But news of Joe Biden's electoral win on Saturday had calmed the markets and shored up sentiment in the oil complex on Monday. Though President Donald Trump has not yet conceded, it may be only a matter of time; his legal challenges are not expected to reverse the outcome. 
We take a look at how a Biden administration may impact the oil sector at home and overseas. On balance, it is neither clearly bullish nor bearish and may take a while to play out. So, don't rush in with any bets yet.
Meanwhile, with the distraction of US elections (mostly) over, the oil market will return to a focus on fundamentals, which continue to look weak. But the OPEC/non-OPEC alliance may have a trick up its sleeve.

Biden Win Neutral for Oil for Now, Market Focus Back on Fundamentals

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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OPEC+ Sets Stage for a Tumultuous Start to 2021 in Oil Markets

The OPEC+ alliance managed to preserve unity with a compromise deal Dec 3 on supply policy for early 2021. But embracing an unprecedented and...

Vandana Hari

OPEC+ Compromise on Q1 Oil Supply Portends Heightened Price Volatility

Crude has rallied to fresh 9-month highs in a knee-jerk reaction to OPEC+'s compromise decision on Thursday to boost supply by 0.5 mil b/d from...

Vandana Hari

Weekly Oil Views: Crude Jumps 30% on Vaccine Cheer but Not Immune to Pullback

Crude prices surged last week to nearly 9-month highs. November, the month of 3 vaccine success stories, alone has produced a 30% spike. How has...

Vandana Hari

Weekly Oil Views: Brent Eyes $45 on Vaccine Hope but Can't Ignore Current Realities

Oil has priced in future optimism on the back of a handful of Covid vaccines approaching the finish line. But unlike equities, oil is grounded in...

Vandana Hari

Biden Win Neutral for Oil for Now, Market Focus Back on Fundamentals

A Biden win has bullish as well as bearish implications for oil. But they may balance out and take a while to play out. So hold your bets. For now,...

Vandana Hari

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