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.

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The summer bump for oil is over, and the Delta slump is here.
Brent's $70.59/barrel settlement on Friday represented a nearly 9% discount to its 32-month-high settle of $77.16 on the 5th of July.
The Delta wave situation is still fluid. It will keep the market in a state of flux and maintaining a nervous watch on the trajectory of the resurgence and outbreaks, especially in the US and China. 
A return to the dizzying price rally of the past few months is out of the question.
The IEA last week slashed its global demand forecast for the second half of this year by 550,000 b/d from last month. Though OPEC left its demand projections unchanged, it was on the same page with the IEA in upgrading expectations for non-OPEC production, especially the US, in 2022.
Current supply-demand estimates for 2022 suggest OPEC+ may not be able to carry on with its 400,000 b/d monthly tapering path next year without risking oversupply, at least in the first half.
The prospect of having to curtail output for longer as US production returns to growth could spell trouble for the alliance’s cohesion.

The summer bump for oil is over, and the Delta slump is here.
Brent's $70.59/barrel settlement on Friday represented a nearly 9% discount to its 32-month-high settle of $77.16 on the 5th of July.
The Delta wave situation is still fluid. It will keep the market in a state of flux and maintaining a nervous watch on the trajectory of the resurgence and outbreaks, especially in the US and China. 
A return to the dizzying price rally of the past few months is out of the question.
The IEA last week slashed its global demand forecast for the second half of this year by 550,000 b/d from last month. Though OPEC left its demand projections unchanged, it was on the same page with the IEA in upgrading expectations for non-OPEC production, especially the US, in 2022.
Current supply-demand estimates for 2022 suggest OPEC+ may not be able to carry on with its 400,000 b/d monthly tapering path next year without risking oversupply, at least in the first half.
The prospect of having to curtail output for longer as US production returns to growth could spell trouble for the alliance’s cohesion.

Weekly Oil Views: Crude Bids Farewell to Summer Bump, Prices in the Delta Dent

Last week’s oil market bore out the postulation in our previous commentary, that the world has likely entered peak transition between “fighting Covid” and “living with Covid”, a period of heightened uncertainty and unpredictability.The raging Delta variant-led global resurgence of Covid continued to occupy centre-stage last week, with growing outbreaks in the world’s top two oil consumers, the US and China, the focus of attention. In a slow-motion recapitulation of the price crash of 19th July, demand fears pounded Brent and WTI futures down by around 8% through the first half of the week. The Delta resurgence, now gripping a country that has among the world’s highest vaccination rates and a country that had managed to deliver on a “Zero Covid” strategy for well over a year, is a painful reminder that we are still at sea when it comes to figuring out this pandemic.We feel vindicated in standing apart from the raging bulls calling for $80 (or higher) crude this summer, and projecting a $65-75/barrel range for Brent.The highly-anticipated summer bump for crude may already be over and a challenging autumn and winter may be lying in wait round the corner.

Last week’s oil market bore out the postulation in our previous commentary, that the world has likely entered peak transition between “fighting Covid” and “living with Covid”, a period of heightened uncertainty and unpredictability.The raging Delta variant-led global resurgence of Covid continued to occupy centre-stage last week, with growing outbreaks in the world’s top two oil consumers, the US and China, the focus of attention. In a slow-motion recapitulation of the price crash of 19th July, demand fears pounded Brent and WTI futures down by around 8% through the first half of the week. The Delta resurgence, now gripping a country that has among the world’s highest vaccination rates and a country that had managed to deliver on a “Zero Covid” strategy for well over a year, is a painful reminder that we are still at sea when it comes to figuring out this pandemic.We feel vindicated in standing apart from the raging bulls calling for $80 (or higher) crude this summer, and projecting a $65-75/barrel range for Brent.The highly-anticipated summer bump for crude may already be over and a challenging autumn and winter may be lying in wait round the corner.

Weekly Oil Views: Delta Surge in US, China Portends Bumpy Demand Recovery

The ongoing Delta resurgence across the globe has amplified the dichotomy between the haves and the have-nots in terms of countries with access to Covid vaccines.Wide disparity in vaccination rates between countries hit by the Delta variant is translating to a huge variance in hospitalisations, deaths, and government response to fresh outbreaks.The correlations or the chain of events and reactions that the market had come to rely upon through 2020 to guide outlook and sentiment are breaking down.The world may have entered a period of peak transition between “Fighting Covid” and “Living with Covid”. And it could be a long one.

The ongoing Delta resurgence across the globe has amplified the dichotomy between the haves and the have-nots in terms of countries with access to Covid vaccines.Wide disparity in vaccination rates between countries hit by the Delta variant is translating to a huge variance in hospitalisations, deaths, and government response to fresh outbreaks.The correlations or the chain of events and reactions that the market had come to rely upon through 2020 to guide outlook and sentiment are breaking down.The world may have entered a period of peak transition between “Fighting Covid” and “Living with Covid”. And it could be a long one.

Weekly Oil Views: Delta Surge Makes Global Oil Demand Picture Murky

Crude’s 7% crash last Monday, July 19, was a stark reminder that the Delta variant is exploiting the world’s considerable vaccine gaps to keep the pandemic alive and there are chinks in the armour of even die-hard oil bulls betting on a steadily accelerating global demand growth.Prices had recouped all the losses by the end of the week, but remained well below the 32-month highs hit earlier this month.Our latest monthly Bulls &amp; Bears report lays out our sentiment on oil prices for the near-term and the next three months, supported by reasons.

Crude’s 7% crash last Monday, July 19, was a stark reminder that the Delta variant is exploiting the world’s considerable vaccine gaps to keep the pandemic alive and there are chinks in the armour of even die-hard oil bulls betting on a steadily accelerating global demand growth.Prices had recouped all the losses by the end of the week, but remained well below the 32-month highs hit earlier this month.Our latest monthly Bulls &amp; Bears report lays out our sentiment on oil prices for the near-term and the next three months, supported by reasons. 

Bulls & Bears: Near- And Short-Term View on Oil Prices

The OPEC/non-OPEC alliance just got back on the horse!
A two-week stalemate over the 23-member alliance's supply policy that had kept the oil market on tenterhooks was resolved with a multi-pronged deal on Sunday. The OPEC/non-OPEC alliance agreed to collective ease supply by 400,000 b/d each month starting in August, until all the remaining cuts have been unwound, potentially by September 2022.
The UAE secured the hike in its production baseline effective May 2022 that it had sought, but unexpectedly, so did four others -- Saudi Arabia, Russia, Iraq and Kuwait.  
The final agreement appears to be a "new, improved" version of the one that was scuppered by the UAE's request a fortnight ago. It offers longer-term guidance to the oil market than originally planned and may just avert further cracks in the group as its members, especially the handful with substantial spare capacity, get ready to grab back market share amid recovering global demand.
We expect the deal to open the door for the next leg higher in crude prices.

The OPEC/non-OPEC alliance just got back on the horse!
A two-week stalemate over the 23-member alliance's supply policy that had kept the oil market on tenterhooks was resolved with a multi-pronged deal on Sunday. The OPEC/non-OPEC alliance agreed to collective ease supply by 400,000 b/d each month starting in August, until all the remaining cuts have been unwound, potentially by September 2022.
The UAE secured the hike in its production baseline effective May 2022 that it had sought, but unexpectedly, so did four others -- Saudi Arabia, Russia, Iraq and Kuwait.  
The final agreement appears to be a "new, improved" version of the one that was scuppered by the UAE's request a fortnight ago. It offers longer-term guidance to the oil market than originally planned and may just avert further cracks in the group as its members, especially the handful with substantial spare capacity, get ready to grab back market share amid recovering global demand.
We expect the deal to open the door for the next leg higher in crude prices. 

Weekly Oil Views: OPEC+ Deal May Unlock Next Leg Higher in Crude

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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Weekly Oil Views: Crude Bids Farewell to Summer Bump, Prices in the Delta Dent

Goodbye summer bump, hello Delta slump. A fortnight of demand recalibration has shaved 9% off crude's 32-month highs hit in early July. The oil...

Vandana Hari

Weekly Oil Views: Delta Surge in US, China Portends Bumpy Demand Recovery

A Covid resurgence in the US and China, world's two largest oil consumers, has shaken market confidence in oil demand recovery, lopping 8% off...

Vandana Hari

Weekly Oil Views: Delta Surge Makes Global Oil Demand Picture Murky

The Delta strain has made it harder to get a read on global oil demand recovery and any future "variants of concern" may perpetuate that. Thanks to...

Vandana Hari

Bulls & Bears: Near- And Short-Term View on Oil Prices

Our outlook on benchmark crude prices is Neutral for the near-term and Mildly Bullish for the next three months. We explain in a succinct, one-page...

Vandana Hari

Weekly Oil Views: OPEC+ Deal May Unlock Next Leg Higher in Crude

An OPEC+ deal Sunday for a gradual monthly ramp-up in supply and an extension of the master agreement to curb output to December 2022 could open...

Vandana Hari

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