Tight oil: how the market rediscovers geopolitical alarm
With the escalation in the Middle East, funds - now in unprecedented bearish positions - are buying again and pushing Brent crude up to USD 75 per barrel. But headwinds are still dampening the rally: eyes remain on Opec+.
3' min read
3' min read
The geopolitical alarm - long relegated to the background - returned to shake the oil markets. Barrel prices continued to run on Wednesday 2, following the previous session's jump, with rises of more than 3% pushing Brent above the psychological threshold of $75 during trading.
By contrast, the further escalation in the Middle East had a more limited impact on other assets and even on gold, which although remaining close to all-time highs quickly exhausted the price flare-up following the Iranian missile launch in Israel to fall back to around USD 2,650 an ounce.
The markets in general remain very nervous, as is normal in times of great uncertainty. And oil has nevertheless shown that it has not completely diverted attention from developments on other fronts.
Thus the rises were scaled back during the course of the day, after the US inventory data (which had a bearish flavour, with heavy crude oil stockpiling and petrol demand at six-month lows) and following the meeting of a select committee of Opec+ ministers, in which the Saudis and Russians also sit: the meeting of the Joint Ministerial Monitoring Committee (JMMC) gave no indication of a possible change of plan on the withdrawal of production cuts, which should then begin in December.
As a Opec note reported, the Jmmc nevertheless 'emphasised the critical importance of achieving full compliance (with allocated quotas, ed.) and compensation', i.e. the recovery of arrears from hitherto less diligent countries.
