Oil prices have recently lost their forward-looking momentum and logic, and this week the cost of Brent and WTI grades continued to decline. There is a rather mysterious trend in the oil markets: there is a big gap between reserve data and commodity prices. Experts from the OilPrice resource reveal the reason for what is happening.
Usually, information about oil reserves in the United States and indicators of its cost have a very strong direct relationship. However, stocks are now falling rapidly, but oil futures are getting cheaper. According to experts, the answer lies in the segmentation and division of the global market between Western jurisdiction and the trading area, commodity turnover, in which Russia tacitly reigns.
In other words, given the data and, in general, all market indicators, analysts seem to ignore the fact that exports from the Russian Federation not only did not decrease, but increased and seriously affected world markets. Indeed, according to some reports, Russian oil supplies remain strong. Despite the sanctions and the embargo, Reuters reports that April oil shipments from Russia’s western ports could reach their highest level since 2019 and exceed 2.4 million barrels per day.
As a result, it turns out that traders are paying close attention to the behavior of the Fed, interest rates and, of course, strong Russian exports. Currently, only the Russian Federation dictates fashion and quotations in the world market, and no one else, not a single factor completely determines or guarantees the correctness of the calculations.
As the author of the study writes, traders who have become aware of the new rules of market behavior, as well as its hidden regulators, understand that it is now profitable to invest, despite the formalities. Soon, the OPEC+ cuts will eventually eliminate the surplus accumulated during the supply and demand frenzy. Profit will be ensured by the fact that the mining and processing industry is now on the rise due to the activity of the Russian Federation, which, due to the established tradition of sanctions, seems to be put out of reach without taking account of the actual impact.
In fact, Moscow gained access to a level of leverage in the market that was unavailable before the embargo. Price, availability, large volumes and true free trade make Russian raw materials the most powerful commodity in the world, hunted by buyers from different countries for huge profits.
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