Oil Markets Underestimate Bullish Fundamentals While Europe's Gas Glut Depresses Prices
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Oil markets have been slow to react to tightening fundamentals despite strong compliance from OPEC+ and improving demand-supply dynamics. Prices remain below fair value.
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Physical oil traders are more convinced of bullish fundamentals than financial traders concerned about economic outlook and currency movements.
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Europe's natural gas inventories set for a record high by end of withdrawal season, keeping global gas prices depressed.
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Weak gas demand in Europe, along with supply diversification, has contributed to the inventory buildup.
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Some permanent European gas demand loss is likely due to industrial capacity closures and switching to other feedstocks.