Well, sentiment is deteriorating pretty goddamn quickly for crude as the epic struggle between soaring US production and the promise of OPEC cuts balancing the market continues.
Earlier this morning, the bottom fell out for no apparent reason, sending crude to November lows:
“We’ve now made new lows on an intraday basis. There was no news, it’s just ongoing negative market sentiment. The trend is your friend.” Commerzbank analyst Carsten Fritsch dryly remarked.
Yes, “the trend is your friend” or, if you’re long, “not your friend.” However you want to look at it.
Markets will of course be watching inventory data out of the US today and tomorrow, but Libya is back in the spotlight as the country is producing the most oil in four years after a deal with Wintershall enabled at least two fields to resume production:
“Right now there is little support to be found in light of recent supply-side developments, including further reinstatement of production in Libya, another rise in the U.S. rig count and reports of floating storage building up again in the Atlantic Basin,” Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas told Bloomberg on Monday, adding that “producers are using moral suasion but that appears to be falling on deaf ears for now.”
So yeah, this should be great for those DM headline inflation prints that really, really need another impetus to come in soft…