By Srinivas Chowdary Sunkara // petrobazaar // 10th July, 2018.
Both the benchmark futures closed higher on Monday. Brent closed up $0.96 at $78.07 a barrel while WTI posted a gain by a nickel to $73.85 per barrel. Asian Markets opened with an upside gap today.
Market witnessed a dramatic drop in oil inventories over the past year due to OPEC cuts turned out to 2.8Mbpd as it was supposed to be 1.8Mbpd as agreed. Implosion of Venezuela dropped production from 2Mbpd to 1.3Mbpd during the year. Woes in Libya, Zero imports from Iran beginning from Nov, Canada outages and uncertainty over how much oil Saudi is going to produce to replace the upcoming oil deficit are the moving factors caused to escalate the tensions and supported the oil prices.
To retaliate U.S sanctions and grabbing of its market share by siblings, Iran warned to potentially block shipments through the 'Straight of Hormuz'. Trade tariff tension between U.S and China are in focus as it may significantly affect the global trade which in turn may affect oil demand and price. Now all eyes are on hurricane season in Atlantic. Short term Monthly reports by IEA and OPEC are due in this week which may create some volatility.
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