The Mounting Impact of International Relations on Energy Markets | July 2019 Advisor Preview

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A myriad of upward and downward energy price drivers influenced significant volatility throughout June, reinforcing the distortion that exists in traditional retail-based fuel reimbursement practices. In this edition of the Breakthrough Advisor, the Applied Knowledge Team offers their in-depth analysis of what triggered June’s price swings, in addition to providing an updated outlook and forecast based on the market’s recent events.

The Advisor Team leverages a data-driven approach to present shippers actionable insights into what will influence diesel prices for the extended time horizon. Remaining in-tune to world oil market fundamentals, economic developments, and the overhanging geopolitical risk environment best positions stakeholders to understand transportation fuel spend and its everchanging behavior.

OPEC+ Meeting and G20 Summit

The much-anticipated mid-year meeting for participants of the Organization of Petroleum Exporting Countries and its allies will take place on July 1-2 and will likely provide more guidance for the oil market through the second half of 2019. Some of the world’s most influential producers will gather to discuss the market’s condition and decide whether to manipulate production quotas to ensure supply and demand remain balanced. Oil prices – a prominent component of market-based diesel prices – will undoubtedly guide conversations, with the meeting’s outcome likely to spark price volatility for both crude oil and refined products. Learn more about the cartel’s likely considerations and what an array of potential outcomes could mean for diesel prices in this month’s edition of the Breakthrough Advisor.

Leaders from G20 nations – which comprise approximately 80 percent of the world’s gross domestic product – convened in Osaka, Japan at the end of June to discuss the most pressing financial and economic issues, globally. Trade policy, climate change, and the recent uprising in various Persian Gulf regions were heavy topics of discussion, with the underlying economic sentiment likely to have demand implications that will carry over to the energy market. What were outcomes of the event, specifically as they pertain to transportation fuel prices? Find out in the July Advisor publication.

Rising Tension in the Persian Gulf

A series of attacks in the Persian Gulf near the oil-centric Strait of Hormuz remains a focal point of conflict in the Middle East. Oil tanker, pipeline, and drone attacks solidified the upside price risk on the global oil market, leaving diesel prices subject to any more developments. Strained US-Iran relations are the root cause of the persistent uprising, leaving significant oil supply and infrastructure in jeopardy of disruptions of the conflict escalates further. In this month’s advisor, the Applied Knowledge team will discuss how prices fluctuated following these events, specifically viewing the conflict from the diesel price perspective.

This edition of the Breakthrough Advisor publication provides a detailed analysis of the energy market’s most relevant news and data-driven insights concerning shippers’ fuel management strategies. If interested, you can gain further details on rapidly changing market dynamics and industry trends by signing up for the Breakthrough Advisor Brief or contacting the Applied Knowledge Team directly.

 

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