➡️ The release of 180 million barrels of US strategic reserves to the market will help the oil market balance in 2022, increasing supply by 1 million barrels per day within six months, analysts at Goldman Sachs write.
According to analysts, the additional supply "will not solve the problem of a structural supply deficit that has been building up over the years." “In fact, lower prices in 2022 will support oil demand while slowing down the acceleration in shale oil production and keeping the current deficit in 2023, as well as the likely need to replenish strategic reserves.”
Thus, the release of reserves will reduce incentives for shale oil producers in the face of declining asset prices. This is microeconomics, so this shouldn't be news. We could raise our 2023 Brent forecast by $5/bbl above our current 110 estimate to reflect higher demand and lower supply of shale oil after 2022 ends.
At the moment, technically, the instrument is in the balance of 105.85 - 114.83. The market setup for today speaks in favor of purchases, however, there is resistance at 108.25 ahead, which is expected to be broken by buyers.
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👇🔥LINKS TO PREVIOUS IDEAS AND FORECASTS🔥👇
According to analysts, the additional supply "will not solve the problem of a structural supply deficit that has been building up over the years." “In fact, lower prices in 2022 will support oil demand while slowing down the acceleration in shale oil production and keeping the current deficit in 2023, as well as the likely need to replenish strategic reserves.”
Thus, the release of reserves will reduce incentives for shale oil producers in the face of declining asset prices. This is microeconomics, so this shouldn't be news. We could raise our 2023 Brent forecast by $5/bbl above our current 110 estimate to reflect higher demand and lower supply of shale oil after 2022 ends.
At the moment, technically, the instrument is in the balance of 105.85 - 114.83. The market setup for today speaks in favor of purchases, however, there is resistance at 108.25 ahead, which is expected to be broken by buyers.
➖➖➖➖➖➖➖
👍Thanks for your comments and likes👍
👇🔥LINKS TO PREVIOUS IDEAS AND FORECASTS🔥👇
