In brief
OilOilAssetEnergy commodity whose price reflects supply, demand, inventories, logistics and geopolitical risk.Open in the Market Map ↗ falls for a third session, with BrentOilAssetEnergy commodity whose price reflects supply, demand, inventories, logistics and geopolitical risk.Open in the Market Map ↗ below US$ 103, after Saudi Arabia began offering extra cargoes via Oman and signalled a partial restart of the East-West pipeline.
The drop reverses the rally that began with the Houthi attacks.
What we know
04Verified fact · material
BrentOilAssetEnergy commodity whose price reflects supply, demand, inventories, logistics and geopolitical risk.Open in the Market Map ↗ closed September 17 down 0.95% at US$ 104.82 a barrel and WTIOilAssetEnergy commodity whose price reflects supply, demand, inventories, logistics and geopolitical risk.Open in the Market Map ↗ fell 0.51% to US$ 101.91, as concerns over Saudi supply eased.
A close that confirms the reversal of the previous week rally.
Verified fact · material
Saudi Arabia began offering more cargoes to Asian refiners through ship to ship transfers in Oman and seeks to restore part of the East-West pipeline capacity, while the US Energy Secretary signalled a faster return of the pipeline.
It is the supply fact that changes the price direction.
Context
On the morning of September 18 BrentOilAssetEnergy commodity whose price reflects supply, demand, inventories, logistics and geopolitical risk.Open in the Market Map ↗ was down 2.52% at US$ 102.20 and WTIOilAssetEnergy commodity whose price reflects supply, demand, inventories, logistics and geopolitical risk.Open in the Market Map ↗ down 2.30% at US$ 99.57, in the third straight session of losses, according to Reuters via Money Times.
Intraday move not yet closed.
Sources[03]
Transmission to assets
Market read-through
BrentOilAssetEnergy commodity whose price reflects supply, demand, inventories, logistics and geopolitical risk.Open in the Market Map ↗ back near US$ 100 reduces the Petrobras diesel gap and the need for new subsidies, and takes pressure off fuel inflation.
Petrobras, PRIO and Brava lose part of the premium accumulated since the Saudi crisis began.
Portfolio impact
02Lower BrentOilAssetEnergy commodity whose price reflects supply, demand, inventories, logistics and geopolitical risk.Open in the Market Map ↗ reduces export revenue and the stock premium.
Decline proportional to BrentOilAssetEnergy commodity whose price reflects supply, demand, inventories, logistics and geopolitical risk.Open in the Market Map ↗.
What would change the view: Offset by a smaller diesel gap.
Cheaper oilOilAssetEnergy commodity whose price reflects supply, demand, inventories, logistics and geopolitical risk.Open in the Market Map ↗ reduces pressure on diesel and gasoline.
Less need for subsidies.
What would change the view: Depends on the price staying below US$ 105.
Direction is an explanatory hypothesis, not a forecast or recommendation.
Next signals
What to watch
- September 18 close and the US$ 100 mark on BrentOilAssetEnergy commodity whose price reflects supply, demand, inventories, logistics and geopolitical risk.Open in the Market Map ↗
- Effective capacity restored on the East-West pipeline
- New Houthi attacks on Saudi infrastructure
Limits of the reporting
What remains uncertain
- Whether the Saudi supply recovery is durable
- The effect of global rate hikes on oilOilAssetEnergy commodity whose price reflects supply, demand, inventories, logistics and geopolitical risk.Open in the Market Map ↗ demand