Recent data from the Nigerian Upstream Petroleum Regulatory Commission has painted a picture of diminishing oil supplies, revealing a 10% drop in oil production last month. This decrease, amounting to around 4 million barrels, translates to a daily production of 33.5 million barrels. This downturn not only translates to a $325 million (USD) setback for Nigeria but also exacerbates the existing supply-demand deficit in the global oil market.
USOIL has witnessed a remarkable jump of +13.26%, climbing from $79.20 to $89.70 in just three days. This surge can be attributed to anticipated lower OPEC+ exports for August. Furthermore, the Nigerian production cut is expected to add more fuel to this fire, potentially driving prices higher.
While the current USOIL price is notably distant from its July peak of $1978, and even further from 2023’s high of $2049, this recent uptick could indicate the onset of a much-anticipated rebound in oil prices. Current trading sentiments from Exness reflect this optimism, showing that a significant 75% of traders are presently bullish on USOIL. This minor yet impactful rally seems to be gathering momentum.
Bullish Bets Drive Oil Prices Upwards
With global inventories tightening, oil prices have been on an upward trajectory. Speculators are jumping on the bandwagon, anticipating further hikes in the near future. As of now, both Brent crude and WTI have seen a 0.9% increment, standing at $85.54 a barrel and $81.36 respectively. ING analysts provided further clarity, stating, “The latest positioning data reveals a surge in speculator confidence. Net long positions in ICE Brent have risen by 19,748 lots, now totaling 230,735 lots.” These speculators leveraged the dip in prices last week to establish their bullish stances.
One pressing concern fueling this trend is the notably tight gasoil inventories in the Amsterdam-Rotterdam-Antwerp (ARA) region, especially as winter approaches. Recognized as one of the prime global oil hubs, the ARA region's inventory status is a significant indicator of global supply dynamics. Given the current scenario, traders and speculators worldwide are closely watching these developments, anticipating potential market shifts as the winter season draws near.