Supply and Demand - Oil supply is growing rapidly [1] Geopolitical Risks - Market's geopolitical risks are increasing [1]

EQUITY FUTURES HIGHER ON THE S&P FUTURES, YIELDS MARGINALLY HIGHER ON THE 10 YEAR AND CRUDE CONTINUING TO FALL. THE REAL QUESTION HERE WITH THE OVERSUPPLY, EARNINGS FROM OIL GIANTS ARE CROSSING AT THIS HOUR AND EXXON SHARES LOWER. CHEVRON RISING AFTER POSTING STRONG RESULTS, JOINING US NOW IS THE HEAD OF RESEARCH.DAN, THANK YOU FOR BEING HERE. I'M WONDERING WITH OIL GIANTS WHAT IT TELLS YOU ABOUT THE PATH OF PRODUCTION IN THE MONTHS AND YEARS TO COME. DAN: THE EARNINGS HELP US TO CHECK IN ON THE KEY ASSUMPT ...

Core Viewpoint - Oil prices experienced a slight increase due to geopolitical tensions in Europe and the Middle East, despite concerns regarding potential increases in oil supply and the impact of trade tariffs on global fuel demand [1] Group 1: Geopolitical Factors - Geopolitical tensions in Europe and the Middle East are contributing to the upward pressure on oil prices [1] Group 2: Supply and Demand Concerns - There are concerns about the prospect of increased oil supply which may counterbalance the price increase [1] - Trade tariffs are raising concerns about their potential impact on global fuel demand [1]

Oil Market Dynamics - Chinese traders are considered the most influential oil traders, primarily due to their significant purchases of Iranian crude oil [1] - Approximately 80% of Iranian oil is re-flagged through Malaysia before being exported, mainly to China [1] - The White House has seemingly turned a blind eye to sanctions, allowing Iranian oil to continue flowing at high levels [2] - There are concerted efforts to avoid interrupting the oil supply, with no party, including Iran, wanting to halt the flow [2] - Concerns about Iran closing the Straits of Hormuz are less about physical barriers and more about the potential for missile attacks on tankers [3] Supply and Demand - Current oil demand is extraordinarily high at 103 million barrels per day, equivalent to approximately 1300 barrels per second [5] - Global oil production capacity stands at 108 million barrels per day, indicating a spare capacity of 5 million barrels per day [5] - Spare capacity is primarily located in the Gulf region [6] - Strong demand, particularly due to Middle Eastern heat, has supported oil prices, with an extra 400,000 barrels per day of demand [9] - A cold winter in key markets (Northeast Asia, Europe, and the US) added over 1 million barrels per day of extra demand in Q1 [9] Geopolitical Risks and Market Sentiment - The market perceives a low risk of interruption in the Straits of Hormuz, as major players like China, the US, Europe, and Saudi Arabia want the oil to keep flowing [6] - The likelihood of the Straits of Hormuz being shut by the end of June is considered extremely low [7] - The market is in a plentiful supply situation, potentially pushing commodity prices lower even after accounting for risk premiums [8] - Incremental geopolitical disasters are needed to significantly increase oil prices [10]