After weeks of the rapid rally, oil market participants showed slight reluctance to buy crude at the current levels. Although it got to $85.48 at the first of the week, Brent closed at $84.68 and WTI closed the week at $84.15 on Friday. However, it does not exactly mean the end of the rally. Reports show that options traders are betting for prices over $200.
Saudi Arabia also had a message for those who are betting high: Look beyond the end of this year. The country also talked about an upcoming oversupply of next year.
Biden blames OPEC+ for the increasing prices of gas. Prices are likely to soar into next year. The US is still eager to put pressure on the Middle Eastern countries and allies to increase the crude supply. The country has not had much success in persuading the cartel.
The rise of consumer prices in September sent inflation up 5.4% compared to the former year. It is the largest increase since 2008. Coming up with the rising inflation and certainties about the reality of it, traders are getting cautious about tapering. Therefore, the dollar decreased in value.
India, the third-largest crude importer, asked oil producers to conduct fixed-price supply contracts for crude oil. IOC seeks more long-term supply deals to include a fixed selling price.
Petrochemicals were still booming the market as well. Bitumen CFR prices had a severe rise at the first of the week. Japan started stocking up LNG ahead of winter; therefore, there is a low possibility for any coming decrease in LNG prices.
This article was prepared by Mahnaz Golmohammadian, the Content specialist and market analyst of Infinity Galaxy.