US President Joe Biden, Federal Reserve can't afford further rally in oil prices: Christopher Wood
US Fed's plan to slash benchmark rates by the end of 2024. "The oil price has begun to appreciate since the International Energy Agency (IEA) on 14 March increased its demand forecast and reduced its supply forecast.
Oil demand growth in 2024 was revised up by 110,000 b/d from 1.2m b/d in February to 1.3m b/d, while 2024 supply growth forecast was reduced from 1.7m b/d in February to 800,000 b/d," Moneycontrol quoted Christopher Wood as saying in the Greed and Fear report. Elaborating on the US oil supplies, Christopher Wood expressed concerns about production numbers from the US shale regions and anticipated that all the major shale regions in America have peaked.
"Total crude oil production in the six shale regions outside the Permian, at 3.65m b/d in February, remains 20% below their peak of 4.54m b/d reached in October 2019," he added. The report comes amid intense war in two parts of the world- the Israel-Hamas war in Gaza and the Russia-Ukraine war in Europe.
The conflict has disrupted the oil supply chains across the world, but the adequate supply has oil has prevented extraordinary rises in prices. The US has been reeling under inflation for the past few years and the Federal Reserve has been forced to keep benchmark interest rates unchanged at 5.25 percent - 5.50 percent for its fifth straight meeting recently.
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