Oil Decouples From Geopolitics With Higher Supplies

At long last, market fundamentals appear to be catching up to crude, defying worldwide turmoil that typically would trigger an oil spike. Surging U.S. production and a still uneven global recovery have tamed demand and suppressd a rally that in June saw Brent and West Texas Intermediate skyrocket to their highest levels of 2014. Both benchmarks have done a 180-degree turn since then, with WTI languishing near its weakest since February and Brent hunkered at 13-month lows.

The reasons behind the sharp turnabout were highlighted this week by the International Energy Agency. The monitor cited surging supply from both the United States—now the second-largest non-OPEC oil producer—and Saudi Arabia helping to boost global supply to 93 million barrels per day last month. That helped offset outages from other oil producers such as Libya, Colombia and Yemen, the IEA said.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza