Potential Energy in Oil Markets S5 | E37

World of Oil Derivatives

A volatile market influenced by OPEC headlines is still leaving oil markets sitting anxiously in “wait and see” mode. With the anticipation surrounding the upcoming OPEC meeting, Brent crude has been oscillating around $80. The market is expecting OPEC to deepen existing cuts, with fundamentals largely skewed to the downside.

Refinery margins have been improving week on week due to crude weakness although we're seeing weakness down the barrel in the products. There was an improvement of over a dollar whilst there was weakness across most products including gasoil and EBOB. Martha explains why.

Martha recommends the LNG story as the one to watch. Origin Energy announced reduced gas supply to Australian Pacific LNG. A loaded tanker lost power, delaying LNG cargoes. Its two main customers are China's Sinopec and Japan's Kansai Electric.

Vincent has an interesting Trade Idea of the week:

Range trading Q1/Q2 MOPJ swaps

7-day ATR: 4.25

Trade between $14-18/mt

Strategy: Track the 20-day Moving Average.

Exit trade once volatility dies down.

Links below to Greg, Martha, Vincent's LinkedIn pages:

Greg Newman: https://www.linkedin.com/in/oilderivatives/

Martha Dowding: https://www.linkedin.com/in/martha-dowding-ab84801a6/

Vincent Wu: https://www.linkedin.com/in/vincent-wu-099816125/

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