Gas Oil Uptrend Halts in the Short Term
Amidst the recent developments in the energy sector, let’s shift our focus to gas and oil news.
The recent rapid increase in crude oil prices experienced a brief pause, with WTI stabilizing at approximately $90 per barrel. Reports of heightened production from Iran and Nigeria led to OPEC increasing its output by 120,000 barrels per day in September. Nevertheless, OPEC’s data suggests a global deficit of roughly 3 million barrels per day in the fourth quarter.
With diminishing reserves, particularly in the US, this may affect demand dynamics. Currently, we’re in a corrective phase, with the first significant hurdles expected around the confluence of the support level and the upward trend line near $85 per barrel. If the upward momentum persists, the primary target for bulls remains the psychological barrier of $100 per barrel.
European Natural Gas Reserves Strong for Heating Season Ahead
The Dutch TTF, the authority on natural gas, has experienced only minor increases recently, indicating a replenishment period. European Union nations seem well-prepared for the approaching heating season, with an average warehouse filling level of 95%. Furthermore, reduced industrial activity and an unusually warm start to autumn are factors contributing to the prevention of price escalation. This indicates that we will unlikely see a recurrence of last year’s challenges.
The reduced dependence on Russian supplies supports the strengthening of this sentiment. It accounts for approximately 15% of all imports. The continuous local uptrend, which has been ongoing since May, does not display significant indications of strong demand. In the short term, the critical resistance zone is currently at approximately $45, and only a breakthrough from this level will open the way towards the $60 range.
Current Challenges Unlikely to Phase Out Long-Term Bulls
The short-term pause in oil price rises should not deter long-term energy bulls. Wood Mackenzie’s projections indicate that global investments in exploring new resources in the fractional distillation of crude oil will continue to rise. The overall increase will be marking a 5% year-on-year. The International Energy Agency predicts a record demand of 102.2 million barrels per day for this year, with further improvements anticipated in 2024.
Currently, a downward trend is moving towards the end of the decade due to the growth of renewable energy sources. Meanwhile, the march of demand-side influence on oil trading platforms has so far been halted. With high expectations for the next few years, this is an opportune moment to assess entry points in the fossil fuel industries.
In conclusion, the energy landscape is evolving with fluctuations in oil prices and the resilience of natural gas reserves in Europe. Investors closely monitor short-term challenges in the gas and oil markets, but the long-term prospects remain promising. As we navigate these shifts, staying informed about developments in the energy sector will be key for investors and industry observers alike.
