Aftermath of the Russia - Turkey "incident" and Oil's reaction
Yesterday we had another DOE report, confirming API's data, there is a build in overall crude inventory (961k barrels - less than API) for the 9th week in a row and a strong build in cushing inventories (+1.74 mm barrels) for the 3rd week in a row.
After that, Baker Hughes US oil rig count came up with 555 vs 564 prior. US Active oil drilling rigs:
- Prior was 757
- Prior natural gas 193
- Total rigs 744
- Prior total rigs 757
That is the 12th weekly drop in the last 13 weeks to the lowest since June 2010.
As for Oil itself, price climbed up first on the tensions between Russia and Turkey, but then it lost gains after API and DOE reports, but still held its ground again, touching the new level in play 43.63 as on the top side that will give pressure to the price. Still there is a possibility for a jump towards 44.43, but this surely depends on the demand side, and after the "incident" with the Russian airplane after it was shot-down by the Turks, one may speculate about further rising in tensions will follow, and price will go up. My theory on the events is: As we all know, ISIS is selling their Crude to the Turks for about $20 on dumping prices. Several days ago, the Russians destroyed 100 tankers filled with Oil. Question arise why, for where and for whom were these tankers, but mostly they are rhetorical, until it was revealed publicly that ISIS is trading oil with the Turks, this was already well known and obvious even before the public got the info. So someone snapped after the destructions of the oil tankers and flipped the switch, targeting in their worst choice - the Russians.
So the major deal in my opinion is: ISIS can suppress Kurds freely without Turkey's intervention for cheap Oil. Done. Russia won't attack Turkey that's for sure, but they will take their revenge and it already started: Food embargo, deployment of anti-air missile turrets and equipment, they almost raised to the ground the mountain with bombing runs from which the plane was shot down. I would imply only that they will cut most of projects between Russia and Turkey which will affect Europe - mostly the projects surrounding gas lines.
NATO of course backs-out to the shadows from the subjects proving once again that it is ineffective, corrupt, shadowy organization that needs to be restructured and transformed.
Third party involvement. USA could have a major role in the plays here with their goal of destabilizing Russia.
Time will tell, but masks are falling down fast, actions will prove who is on which side.
Trade Oil carefully.