Oil Fundamental Analysis
Oil had a good run overnight, but we are still a tractor pull between global supply deficits and China’s covid demand crunch at the end of the day.
On a positive note, Shanghai is targeting a lockdown turning point by Wednesday, although the outbreak seems to more cities. However, for oil prices to take off on a sustainable trajectory, reopening mainland cities is necessary for translating into a sustainable economic rebound that supports oil demand.
Supply concerns after Libya shut its biggest oil field Monday and warned of further outages as demonstrations against the prime minister take place at the oil field continue to highlight just how bullishly reactive oil markets have become to supply shocks. And without doubt, there is likely to be more in the offing, shining light on the widening global supply deficit.
Given public opinion, the EU is increasingly likely to adopt a phased-in ban on Russian oil,…