Key Takeaways:
WTI crude gapped lower at the open Thursday, extending a decline as traders reduced exposure ahead of the July 4 holiday weekend. The move comes as the market reassesses geopolitical risk premiums tied to the West Asia crisis, where the threat of supply disruptions has yet to translate into actual production losses.
Russia has escalated its hybrid warfare campaign, placing heavy machine guns on sanctioned civilian cargo ships to deter Nato seizures of its shadow fleet, according to intelligence reports cited by The i Paper. Since the start of this year, nine ships from Moscow's shadow fleet of oil tankers have been seized by countries including France and the UK. Ukraine has also struck Russian oil refineries, with President Vladimir Putin admitting the country faces fuel shortages after repeated attacks on processing facilities.
The July 4 holiday typically sees reduced liquidity in US markets, amplifying price moves as traders adjust positions. The next catalyst for crude will be the weekly EIA inventory report, due after the holiday, which will show whether US stockpiles are building.
This article is for informational purposes only and does not constitute investment advice.
