Very thorough and insightful analysis. Helps energy investors maintain a more balanced perspective and avoid the panic of presumably collapsing demand-- a presumption the global supply/demand numbers clearly don't support. Bounce bunny, bounce!
I'm a bit skeptical about "low liquidity" taking the blame for sliding oil prices. First off, notional volume and OI are not that much lower than in the past. Sure, lesser barrels traded, but each one is more valuable. Second (off?), why would the liquidity only exit on the buy side? Seems like sell side would exit as well. I can only surmise low liquidity leads to volatility, which can (and has) take us in either direction.
Along with another commenter here, I'm also wondering how China's SPR will factor into global demand. These past few months, they've undoubtedly taken the opportunity to load up reserves with the discounted Russian stuff... and it'll take awhile for them to chew through that.
Lastly, I just want to say I've enjoyed your writing quite a lot. I look forward to the next piece.
Great commentary! I’ve heard that China has some significant oil reserves like the US SPR, that it may release in tangent with opening the country up. Would love to hear feedback on that.
Very thorough and insightful analysis. Helps energy investors maintain a more balanced perspective and avoid the panic of presumably collapsing demand-- a presumption the global supply/demand numbers clearly don't support. Bounce bunny, bounce!
Great commentary, as always.
I'm a bit skeptical about "low liquidity" taking the blame for sliding oil prices. First off, notional volume and OI are not that much lower than in the past. Sure, lesser barrels traded, but each one is more valuable. Second (off?), why would the liquidity only exit on the buy side? Seems like sell side would exit as well. I can only surmise low liquidity leads to volatility, which can (and has) take us in either direction.
Along with another commenter here, I'm also wondering how China's SPR will factor into global demand. These past few months, they've undoubtedly taken the opportunity to load up reserves with the discounted Russian stuff... and it'll take awhile for them to chew through that.
Lastly, I just want to say I've enjoyed your writing quite a lot. I look forward to the next piece.
Great commentary! I’ve heard that China has some significant oil reserves like the US SPR, that it may release in tangent with opening the country up. Would love to hear feedback on that.