Founder & CEO. Oil markets macro-analysis., Vanda Insights

Vandana Hari

Founder & CEO. Oil markets macro-analysis.

Vanda Insights

Vanda Insights is a Singapore-based boutique provider of intelligence on the global energy markets, launched in September 2016. The venture was born out of a desire to extract the signal from the noise in the complex and often volatile oil markets. Our succinct and clear macro analysis is relied upon by thousands of readers globally, including those doing business directly or indirectly in the physical commodity and derivatives markets; wealth managers; governments, regulatory bodies and think-tanks; as well as trade organizations and educational institutions.

Global Energy Markets

Commodities

A 9% pullback in crude prices last week from 22-month highs notched just a week ago was overdue and exactly as we had been predicting.However, just as Brent hovering around $70/barrel was in overbought territory, it overshot on the downside in last Thursday's dive. Prices staged a modest bounce on Friday and we expect them to crawl back up some more, but not all the way.But more sustainable gains may be awaiting just around the bend, if OPEC+ -- and especially Saudi Arabia -- see last week's jolt as confirmation of the fragility of demand recovery and decide to extend their production restraints for another month, into May.

A 9% pullback in crude prices last week from 22-month highs notched just a week ago was overdue and exactly as we had been predicting.However, just as Brent hovering around $70/barrel was in overbought territory, it overshot on the downside in last Thursday's dive. Prices staged a modest bounce on Friday and we expect them to crawl back up some more, but not all the way.But more sustainable gains may be awaiting just around the bend, if OPEC+ -- and especially Saudi Arabia -- see last week's jolt as confirmation of the fragility of demand recovery and decide to extend their production restraints for another month, into May.

Weekly Oil Views: Crude's 9% Pullback May Prompt Continued OPEC+ Restraint

Crude futures were lurking in overbought territory after hitting 22-month highs earlier in March, with Brent just below $70/barrel and WTI above $66.Thursday's crash marks a cumulative 9% pullback from those highs, but prices may have overshot in the downward direction. We expect a bit of an immediate bounce back up, as some of the panic on the fundamentals as the financials front, which was likely amplified by technical selling on Thursday, subsides.Meanwhile, the price pullback also changes the calculus for the OPEC/non-OPEC alliance's next move, when energy ministers next meet on April 1 to decide their supply policy for May. Caution and continued restraint may carry the day again.

Crude futures were lurking in overbought territory after hitting 22-month highs earlier in March, with Brent just below $70/barrel and WTI above $66.Thursday's crash marks a cumulative 9% pullback from those highs, but prices may have overshot in the downward direction. We expect a bit of an immediate bounce back up, as some of the panic on the fundamentals as the financials front, which was likely amplified by technical selling on Thursday, subsides.Meanwhile, the price pullback also changes the calculus for the OPEC/non-OPEC alliance's next move, when energy ministers next meet on April 1 to decide their supply policy for May. Caution and continued restraint may carry the day again. 

Quick Views: Crude Likely to Recoup Some Losses After 9% Pullback

After a short-lived slide, ICE Brent futures bounced back to just under $70 last week, levels last seen in May 2019.Risk-on trade in the financial markets, a softening US dollar, a continuing plunge in US fuel following the mid-February deep freeze and strong Chinese crude import data for the first two months of the year all conspired to prop up prices.But crude appears to have gotten ahead of itself. Bulls have priced in hope for an economic rebound, the exact nature of which is unknowable, while discounting uncertainty.All of this makes prices ripe for a pullback, again. But we don't see a big correction as long as OPEC+ keeps the supply reins tight.

After a short-lived slide, ICE Brent futures bounced back to just under $70 last week, levels last seen in May 2019.Risk-on trade in the financial markets, a softening US dollar, a continuing plunge in US fuel following the mid-February deep freeze and strong Chinese crude import data for the first two months of the year all conspired to prop up prices.But crude appears to have gotten ahead of itself. Bulls have priced in hope for an economic rebound, the exact nature of which is unknowable, while discounting uncertainty.All of this makes prices ripe for a pullback, again. But we don't see a big correction as long as OPEC+ keeps the supply reins tight.

Weekly Oil Views: Crude, Back near 2-Year Highs, Lurks in Overbought Territory

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

As long as market dynamics remain largely positive and the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US) indexes are above their respective intermediate-term support levels we believe a constructive outlook is warranted. To reiterate, support levels to watch include $90 on ACWI-US, $53 on ACWX-US, and $52 on EEM-US. Open the attached file to read our complete International Strategy document, and to find links to detailed comments and recommendations for each of our 12 Sectors.

As long as market dynamics remain largely positive and the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US) indexes are above their respective intermediate-term support levels we believe a constructive outlook is warranted. To reiterate, support levels to watch include $90 on ACWI-US, $53 on ACWX-US, and $52 on EEM-US. Open the attached file to read our complete International Strategy document, and to find links to detailed comments and recommendations for each of our 12 Sectors.

Global Equity Strategy: Constructive Pullback; Overweight Value

The OPEC/non-OPEC alliance stunned the market with its decision last Thursday to roll over its current production curbs into April.It was in effect a Saudi coup, involving a surprise extension of its 1 million b/d unilateral cut initially instituted for February-March. In a classic head fake (some might say a test balloon), the Kingdom had signalled a desire to reverse this cut, via a report in The Wall Street Journal on February 17. OPEC+ had been widely expected to boost supply by 1.0-1.5 million b/d, taking the cue from a 30% spike in prices this year on an improving outlook for global oil demand.Crude responded with an 8% spike over Thursday and Friday. At the week's close, Brent was eyeing the $70 psychological mark, not seen since May 2019.Here's our take on OPEC+’s latest deal and the bigger shifts underway that it signals.

The OPEC/non-OPEC alliance stunned the market with its decision last Thursday to roll over its current production curbs into April.It was in effect a Saudi coup, involving a surprise extension of its 1 million b/d unilateral cut initially instituted for February-March. In a classic head fake (some might say a test balloon), the Kingdom had signalled a desire to reverse this cut, via a report in The Wall Street Journal on February 17. OPEC+ had been widely expected to boost supply by 1.0-1.5 million b/d, taking the cue from a 30% spike in prices this year on an improving outlook for global oil demand.Crude responded with an 8% spike over Thursday and Friday. At the week's close, Brent was eyeing the $70 psychological mark, not seen since May 2019.Here's our take on OPEC+’s latest deal and the bigger shifts underway that it signals.

Weekly Oil Views: Saudi Masterstroke Puts OPEC+ on a More Hawkish Path

United States

Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. Crude oil can be refined to produce usable products such as gasoline, diesel and various forms of petrochemicals. It is a nonrenewable resource, also known as a fossil fuel, which means that it can't be replaced naturally at the rate we consume it and is therefore a limited resource.

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Crude Oil (CL1 COM COMDTY)

Weekly Oil Views: Crude's 9% Pullback May Prompt Continued OPEC+ Restraint

Crude crashed 9% from recent 22-month highs, jolted by Europe's Covid woes and a bout of fears over inflation in the financial markets. Expect...

Vandana Hari

Quick Views: Crude Likely to Recoup Some Losses After 9% Pullback

Crude futures crashed 7% on Thu, marking a 9% pullback from 22-month highs notched earlier in Mar. They have swung from overbought to oversold...

Vandana Hari

Weekly Oil Views: Crude, Back near 2-Year Highs, Lurks in Overbought Territory

After a short-lived slide, crude was back hovering close to two-year highs last week. It is overbought, with bulls pricing in optimism over a post...

Vandana Hari

Global Equity Strategy: Constructive Pullback; Overweight Value

As long as the MSCI ACWI (ACWI-US), ACWI ex-US (ACWX-US), and EM (EEM-US) indexes are above their respective intermediate-term support levels we...

Vermilion Research

Weekly Oil Views: Saudi Masterstroke Puts OPEC+ on a More Hawkish Path

Saudi Arabia has steered OPEC+ on to a more hawkish path. Crude jumped to highs not seen since May 2019 after producers stunned the market last...

Vandana Hari

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