Despite Turkish turmoil, oil prices have resumed their downturn as the ‘failed coup’ has left flows unhindered and a stronger dollar (and waning gasoline demand) pushed WTI back to a $45 handle this morning.
Catalysts for the downside push appear to be:
- 0il tankers loading, unloading cargoes normally at Turkey’s ports and supplies arriving in ships and pipelines from neighboring countries, according to Turkey’s Energy Ministry.
- Demand for gasoline in the U.S. fell last week even though it remains higher than the same period last year, as well as the five-year average.
However, overproduction in the past means gasoline inventories remain at a high level of around 240 million barrels, says the Oil Market Journal. The worry is that, as the end of the U.S. driving season is around the corner, demand for gasoline will plunge, leaving gasoline stocks elevated.
“With demand failing to meet expectations, and stocks holding high, we believe the risks remain to the downside,” the note says. - And the US dollar is strengthening.
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