Seems like the sceptics who scoffed at the mere mention of $100/bbl Brent earlier this year are now probably eating their words as we inch closer to the $90/bbl mark just four months into the year. Looks like the joke’s on them. OPEC’s sticking to their guns with those output cuts, tightening the screws on crude’s future. Meanwhile, over in the East, Chinese economic data’s painting a pretty rosy picture, what with all those positive PMI readings for March. Countering this, US production has remained near record highs, with US crude inventories seeing an unexpected build this week, rising by 3.2mbbls compared to the expected 1.5mbbl draw however, fuel demand was also seen rebounding from winter lows, with gasoline inventories seeing a bigger-than-expected draw in the past week. Persistent geopolitical tensions in the Middle East also continue to play a pivotal role, with Iran threatening retaliation for a perceived Israeli strike on its embassy in Damascus, pointing to worsening conditions in the region. The threat also came as the Israel-Hamas war showed little signs of de-escalating, as a slew of recent ceasefire proposals fell through. On the whole, it is hard to find a bearish narrative right now.
