Oil dropped today on ceasefire talk, but that does not mean the actual supply problem is fixed. Futures are reacting to diplomacy headlines. The physical market is reacting to whether real barrels are moving, and that still looks weak. Hormuz flows are far below normal, and even with Saudi pipeline help, the gap is massive. So the headline price may look calmer, but the real signal is whether physical supply and shipping actually recover before the ceasefire window ends.
Oil Is Falling on Headlines, but the Real Market Still Looks Broken
byu/NecessaryArtichoke71 inoil
Posted by NecessaryArtichoke71
10 Comments
WTI fell from about $102 yesterday to roughly $95–97 today, but Hormuz throughput is still only around 3.8 million barrels per day versus a normal ~20 million. Saudi’s East-West pipeline can move about 5.9 million bpd at full capacity, which helps, but it still does not replace a functioning Hormuz route. That is why the futures drop looks cleaner than the physical reality.
Negotiations for less than 24 hrs and USA says a deal was impossible and then the markets rally on a deal possibly happening. Make it make sense
There’s no deal. Trump is lying like usual to boost the markets.
Logically, I would expect everything oil related to spike in the next week or two when the shortage really starts to be felt. But I don’t trust logic in this market. I’m down on all my oil plays, and I might be selling at a loss.
Trump and co are just keeping markets up. Reality will hit in about 6 weeks when countries start bidding for oil and the price will rocket upwards for many months. Even if there is a peace deal with Iran.
Right now and always the market is irrational, but reality always catches up, just be patient
As soon as the us ships its oil off to be refined it should get interesting.
Iran isn’t giving up their uranium unless the US takes it by force.
You mean futures in the future don’t reflect spot prices today????
MArket why U stupid!!?? Fuuuuuuu!!!!
I am very long diesel!
Controversial opinion from someone whose made 810% since the first explosions happened: as far as making money is concerned, the digital price is the only price that matters. Forget that a physical price even exists
Trying to draw conclusions from the physical price is going to lead you to a screen with “$0” on it real fast – especially if you’re trading with >5X leverage