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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money 

OIL gains almost 1% to new local highs at $87,5 per barrel amid Beryl hurricane risk 📈

4:12 pm 2 July 2024

Crude oil has started July with gains, and the ongoing rally since the sell-off caused by the OPEC+ decision is certainly attracting interest from Federal Reserve policymakers. Initially, it seemed that the prospect of OPEC increasing supply would weigh on the oil market for longer and give more room for 'dovish' signals from central banks. However, this has not been the case, and investors are gradually pricing in still relatively strong demand (especially in the US according to EIA data, softened by weaker China), as well as geopolitical risks and the prospect of a hurricane season in the Gulf, which could pose additional risks to market supply. Also, the hurricane Beryl which is now near the Caribbean Sea had improved 'category to 'Category 5' hurricane, posing risks to oil supply in the region. OPEC+ has decided to extend ongoing production cuts through 2025, fostering concerns about supply and demand balance, while seasonal oil demand peaks, during the summer months.

  • Brent oil prices are gaining nearly 0.9% today, ahead of the Independence Day holiday in the U.S., although gasoline prices at U.S. stations fell $0.05 m/m to $3.49 (AAA data). TD Securities indicated that speculative long positions are on the rise due to tensions between Israel and Hezbollah and Iran;
  • However, it appears that the geopolitical premium at this stage may support prices, but does not have the potential to lead to a vigorous rise from current levels;
  • The weather season in the Atlantic and Indian Oceans is causing some concern for investors, with Hurricane Beryl now in the storm category, although Price Futures Group believes it does not have the potential to disrupt supply in the Gulf;
  • Currently, JPMorgan is forecasting a global liquid crude oil deficit of 1 million barrels per day (bpd) in the third quarter of 2024, and a significant decline of 1.9 million bpd in August.
  • The bank expects prices at $90 per barrel, in September; Fuel and oil prices would likely rise if a hurricane were to hit refining facilities along the Gulf Coast, so weather in the region, in the near term, is likely to be more significant than usual for traders. Growth is somewhat constrained by the weaker Chinese economy, where orders are falling, and domestic demand remains quite weak.

OIL (H1 interval)

Oil futures are recording a successful start to July after a 6% rise in June and are approaching levels not seen since late April.

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Source: xStation5

The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.

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