EMEA News
Oil Price Bulls Are "Clutching at Straws"
Citibank has joined the chorus of critics dismissing the significance of the current oil price rally by describing it as "bulls clutching at straws."
Citibank analysts said in a note Thursday that "The market clearly wants to see some signs of life in OPEC, but we think bulls (or rather producers fearful of further price falls) are likely to be better served" by examining the outlook for gasoline in the summer.
Crude prices have climbed 14 percent this week, bolstered partly by rumours that Organization for the Petroleum Exporting Countries (OPEC) members might agree to an output slash.
The prices dropped when Saudi Arabia, Russia, Qatar, and Venezuela agreed in principle to freeze but not slash output, and then a day later they climbed again when Iran declared its support for the Saudi/Russian pact.
Bunkers have also been rising, and data from Ship & Bunker Thursday showed key grade IFO380 in Singapore, Rotterdam, and Houston had risen between 11.5 percent and 13.6 percent week-on-week.
As oil climbed again by 2.5 percent on Thursday, Patricia Mohr, analyst at Scotiabank, reiterated the message of other colleagues by declaring that "Given the intention of Iran to lift its oil exports back to pre-2012 levels, actual production cuts by OPEC and Russia are probably needed - even if world demand advances at a healthy 1.8 percent clip in 2016 and U.S. oil production is cut modestly."
An unlikely critic of the Saudi/Russian pact is an unnamed Iranian oil source, who told Reuters, "The problem in the oil market is the glut; there is a need to do something to bring down these extra barrels.
"The freeze for those people that have been producing to the maximum does not help the market."
Meanwhile, Iran is busy returning to the international market, having discussed export deals with Germany, France, Italy, Japan, South Korea, Austria, Iraq, and other nations.
