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IEA chief confirms release of 400 million barrels in strategic in oil reserves

The move is aimed to stabilise marketsOnce again, it’s not so much about the big figure as touted in the headline. As mentioned yesterday:”As mentioned before, it could still take weeks for this oil supply to make its way to refineries and that is what markets need to consider….there are going to be many questions to factor in.How many barrels is the IEA going to draw down from its reserves in the first few weeks?How quickly can these barrels make its way to transport and be shipped to where it needs to go?What is the mix in crude quality that will be involved with the release?Who is going to handle all the logistics and make sure that these barrels can reach refineries in a timely manner?Are refineries able to handle the sudden surge when they all come at one go?It’s not as simple as saying that the 300 million to 400 million barrels will cover everything. There’s a lot more to it and that will be what really influences the outlook for the oil market as the Middle East conflict stretches on for longer.”At around the same time, the IEA also released its latest monthly report noting that the Middle East conflict is creating “the largest supply disruption in the history of the global oil market”. Adding that Gulf countries have cut their total oil production by at least 10 million barrels per day, with losses set to increase without any restart of shipping flows.In looking out for things to return to normal, the IEA notes that it will take “weeks and in some cases months for upstream production to return to pre-crisis levels”.
This article was written by Justin Low at investinglive.com.

🔗 Source

💡 DMK Insight

Oil supply disruptions are still a major concern, and here’s why that matters: traders need to keep an eye on the lag between supply announcements and actual market impact. The recent headlines might suggest immediate relief, but the reality is that it could take weeks for any new oil supply to reach refineries, which means prices might not stabilize as quickly as many hope. This delay could keep volatility high in the energy markets, affecting not just oil but also correlated assets like energy stocks and commodities. Traders should watch for key price levels in crude oil, particularly if it approaches recent highs or lows. If prices remain elevated, it could trigger further speculative trading, especially among retail investors looking to capitalize on perceived opportunities. On the flip side, if the market starts to price in a longer wait for supply, we could see a pullback. Keep an eye on the next few weeks for any shifts in sentiment or unexpected news that could sway prices significantly.

📮 Takeaway

Monitor crude oil prices closely; if they approach key resistance levels, be ready for potential volatility as supply delays impact market sentiment.

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