Brent: Sharp drop questions supply fears – Rabobank

Rabobank’s Senior Market Strategist Benjamin Picton notes Brent futures fell over 7% and Singapore gasoil nearly 11%, despite ongoing geopolitical and logistical disruptions to Oil and refined products. Picton stresses that recent price declines contrast with persistent supply risks, underscoring market “capriciousness” and suggesting traders may be prematurely pricing in resolution of product market problems and an emerging Oil glut.

Oil prices fall despite disruptions

"The front Brent crude future fell by more than 7%, despite the fact that there is no confirmation of material progress in loosening restrictions on global energy flows."

"ICE gasoil futures declined by more than 8.5% despite Russia’s ongoing diesel export ban, continued Ukrainian strikes on energy infrastructure, the Houthis’ recent decision to spread the Iran conflict to Saudi oil infrastructure in the Red Sea and low water levels in the Rhine disrupting energy shipping and forcing freight rates higher."

"Similarly, Singapore gasoil spot prices were down by almost 11% yesterday."

"On those figures you would think all of the problems in product markets are solved."

"This again highlights the capriciousness of markets; it was only a few weeks ago that I was reading articles making straight-faced suggestions of an emerging oil glut."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)