WTI crude oil continued to extend losses on Wednesday to trade just under $96.50. Any news suggesting a possible new supply disruption could easily move WTI prices back towards the $120 region and above.TD Securities strategists report.
Deficit risks persist
“Russian oil production may drop a quarter next month and stay thereor perhaps fall more in the coming months. Similarly, Saudi Arabia and the United Arab Emirates do not promise more crude despite the UK PM’s trip to ask for supply increases”.
“Any unforeseen supply disruption could easily see prices rise back to recent highs above $120 a barrel.as markets expect a second half of 2022 with deficits and low inventories to fill them.”
“There is limited capacity to fully replace or redirect Russian crude in the short termand also in the medium term due to the geography and the lack of infrastructure to bring the supply to the markets that are willing to take that crude.
Source: Fx Street
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