(WCTW) Geopolitics Is The Biggest Distraction To The Oil Bull Thesis
Oil bulls should hate it when geopolitical headlines take over. Why? Geopolitical risks distract everyone from what's happening for the years to come: a structural supply deficit.
Oil bulls should hate it when geopolitical headlines take over. Why? Geopolitical risks distract everyone from what's happening for the years to come: a structural supply deficit.
Oil market fundamentals this year have been healthy, but we are entering a short-term lull. Global refinery maintenance in April coupled with stretched financial positioning means that the headwinds are building for oil prices. Couple all of that with the weakness we are seeing in timespreads and refining margins indicating to me that oil will pull back in the near term.
But don't let any of that distract you from the real setup coming this year. I think as oil pulls back in the near term, opportunistic investors and traders should continue to bet on higher oil prices going into year-end and 2025.
In this article, I will explain why geopolitics has so far been a big distraction amidst a bullish background developing in oil.