Crude oil prices just dropped for the fourth week in a row.

Saudi Arabia reduced supplies after two of its oil tankers were hit by rebel fire in the Gulf of Aden. Russia said that OPEC (of which Russia is not a member) has “fully hedged” potential exposure to U.S. sanctions on Iran.

So, it sounds as if all of the big risks are fully-hedged and oil prices have nowhere to go but up, right? Well, not really.

If you read between the lines in this article, it becomes clear that the oil market is plagued with uncertainty, the claims of “hedging” are coming from parties not fully informed, and further price drops based on slowing growth and excess output are the most likely outcome.

None of this is crystal clear, but declining prices are likely, given excess supplies (from Russia and OPEC) and slowing demand from global growth headwinds (higher interest rates and exchange rates). Let’s see how it plays out, but right now lower oil prices are in the cards.

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