Recession Fears Weight on Market Despite Limited Supplies
July 18, 2022
President Joe Biden met with officials from Saudi Arabia on Friday, and the bottom line is that it did not yield any action to produce more crude oil. This has again increased the concerns about supply and should offer some support to prices. Of course, both sides are reporting a little different version of the result of the meeting.
Russia took the Nord Stream 1 pipeline offline for maintenance a while back and is scheduled to come back online this week. But many fear that Russia may delay that in retaliation for sanctions put on it by Europe. If Russia delays the restart, it will tighten up already tight supplies and rally prices.
After this week saw the market have a nice sell-off Friday, a round of short covering sent higher prices. The market is congesting and working on sorting out the current state. The market is struggling between recession fears and limited supplies. Because of these recession fears, some think the market will not be able to rebound. At the same time, the other side feels that much of the poor outlook is already priced into the market, and the reality of low inventories will hit at some point and push prices higher.