Oil Traders Wary of High Downside Risks

The black liquid hydrocarbon is trading a tad weaker following the gains recorded yesterday. It’s key noting crude oil bulls seem to be suffering from exhaustion as it approached the $43/Barrel critical resistance level since it has taken the black viscous derivative several weeks in trying to break out above such levels, but growing concerns of global energy demand/supply rebalancing had curbed such hopes momentarily.

Amid bullish macros, expected to keep the price of crude hovering significantly higher like the recent restart of talks between the U.S Treasury and U.S Speaker coupled with the ongoing disruption of supplies from the North Sea region, by Norwegian oil workers coupled and the major hurricane storm disrupting oil production around the Gulf of Mexico it is fair to say the Bears still seem to be in control, as prices haven’t moved up as expected, meaning concerns the oil market is getting saturated still weigh heavy on the bulls.

Many energy analysts would normally have anticipated the shutting down of the Johan Sverdrup oilfield a giant oil platform by striking oil workers, will propel the oil bulls with enough gas to breach above the $43/barrel resistance level with ease, but growing concerns on recent political polls saying President Donald Trump, a pro-fossil leader has lower odds of winning the U.S Presidential election, as kept some oil traders off, in the near term, as the ever-changing geopolitical spectrum makes it challenging for traders to take positions strategically.

That said, it will be greatly unfair to rule the bulls out as recent macro, show a leading oil producer Saudi Arabia, raising its price tag on its flagship Asian grade, showing signs that energy demand is picking up howbeit gradually after six weeks of selling discounted crude grades amid falling demand.

Also, the Saudis led by the oil cartel’s Sherriff has shown high optimism that OPEC’s recent cut would help in stabilizing crude oil prices in the mid-term amid strong compliance efforts set in play by the major oil producer.

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