Crude oil prices at $70/bbl may seem overblown, but there are no signs of a change in demand sentiment yet, notes Daniel Ghali, Senior Commodity Strategist at TDS.
The market tone is not favorable for a sustainable rebound
“The cross-section of commodity yields paints a gloomier picture of commodity demand, with no signs of recovery despite implied strength in risk markets. For energy markets, however, the risk is twofold, as slowing demand not only weighs on prices through its traditional implications, but also implies that the substantial amount of supply risk premiums embedded in prices is expected to erode further.”
“The decision by the OPEC+ producer group to delay its planned supply increases has not been enough to halt this trend, and a further slowdown in global demand risks catalysing more substantial repricing in this context. CTAs may be on the supply side, but the market tone is not yet favourable for a sustainable rebound.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
