U.S. West Texas Intermediate and international-benchmark Brent crude oil are in a position to finish the week, month and quarter sharply higher. This quite a turnaround from last month when it was trading sharply lower heading into June
Traders are also saying that all the major shorts may have been taken out with this week’s rally and that the buyers may have exhausted themselves. However, the price action on Friday suggests that buyers are still coming in and aggressively willing to chase this market higher.
Fundamentally, international Brent crude oil remains firm because looming sanctions by the White House against Iran are expected to lead to a sharp drop in supplies from the OPEC-member.
WTI crude oil is being supported by supply disruptions in Canada. North America’s oil markets have tightened significantly this week as an outage of Canada’s Syncrude has locked in over 300,000 bpd of production. The outage is expected to last at least through July, according to operator Suncot.
Besides the looming U.S. sanctions against Iran, which is fueling the rally in Brent futures, and the outage in Canada, which is supporting WTI crude, both markets are also benefitting from supply issues in Venezuela and Libya.
As far as demand is concerned, it has been making records all year, and OPEC has said it will raise output in order to meet demand and replace crude from unplanned disruptions. However, concerns have been raised this week…