Downward pressure on oil via Fed hike fears

Share on twitter
Share on linkedin

rcForty two years to the day after Erno Rubik invented the Rubik’s cube, and the oil market is looking puzzled. As the fear of a potentially hugely huge 0.25% U.S. interest rate hike in June reverberates around the world, a firming US dollar has greased the wheels for an oil sell-off today. Hark, here are five things to consider in the oil market:

1) Venezuela is offering its crude at its biggest discount since 2008 as it scrambles for revenue and battles for market share. The discount of a basket of Venezuelan oil versus WTI is now more than $12/bbl, and is averaging a discount of $8.44/bbl so far this year. While Venezuela’s heavier crude should be at a discount to WTI’s higher quality, light sweet crude, the discount of $3.78/bbl in 2015 and $3.73/bbl in 2014 seems closer to fair value than the current discount.

Venezuela oil

2) Following on from this point we can see in our ClipperData that Venezuelan crude loadings were down