The Bearish Oil Market along with natural gas, which has been falling for the past few days, is driven by a trifecta of bearish catalysts: warm weather, Putin's natural gas intervention, and the agreement to resume talks in Vienna on Iran's nuclear program. After trading above $85 per barrel for the first time in seven years, Brent prices were recorded at $83.60 on Thursday, while WTI prices fell to $82.50. However, natural gas posted the largest decline, with prices dropping 6.3% to trade at $5.81 per MMBtu. The latest EIA report and Standard Chartered's commodity update revealed that U.S. inventories have risen relative to seasonal norms since the end of September. Indeed, the four-week average change has turned positive since early October, partly due to higher-than-usual temperatures, currently reaching +454 thousand barrels per day. This bearish oil market stems from the fact that oil product inventories have not begun the usual sharp seasonal drawdown. Therefore, it wouldn’t be surprising if oil inventories rise to 10.36 million barrels (mb) relative to the seasonal average in the latest data. Even more concerning is the bearish oil market with implied crude oil demand declining (w/w) for all products except jet fuel, with a major mismatch between total crude oil inventories and inventories at the WTI pricing hub in Cushing, Oklahoma. Over the past three weeks, Cushing inventories have dropped by 8.2 mb, while U.S. crude oil inventories have risen by 17.9 mb. Standard Chartered stated that sufficient crude oil availability in the U.S. clearly does not reflect Cushing. However, SC mentioned that domestic price differences should adjust flows sufficiently for Cushing inventories to rise, reducing local shortage distortions. The bank predicted slight tightening through December, followed by a return to a significant surplus in January. Adding to the surplus in the coming year are expectations of higher Iranian exports in 2022, which could moderate the ongoing crude oil rally. Until recently, the rise in U.S. natural gas prices was more driven by concerns over a colder winter and increased export expectations to Asia and Europe than domestic fundamentals. The storage situation in the lower 48 states remains notably more comfortable than in Europe. Moreover, while inventories are below the five-year average, the gap has been narrowing. The latest EIA storage data showed a w/w increase of 92 billion cubic feet (bcf), bringing the total to 3,461 bcf. The gap below the five-year average storage level narrowed for the sixth consecutive week to 151 bcf, 23 bcf less w/w and 84 bcf less than in the first week of September. However, recent developments in the space have disrupted natural gas performance. UK and European natural gas prices fell on Thursday after Russian President Vladimir Putin ordered state-run Gazprom to begin filling storage facilities on the continent starting next month. Gazprom had allowed its storage facilities in Europe to fall to extraordinarily low levels, with critics suggesting that Russia exacerbated the energy crisis to increase pressure on Germany and the European Union to expedite approval of the controversial Nord Stream 2 pipeline. However, Russia has denied those allegations. Serious concerns have arisen about the long-term impact of high prices on future gas demand. Analysts remain divided on whether demand will continue to outpace supply in the coming years. Richard Gorry, Managing Director of JBC Energy Asia, believes the current gas crisis is likely to recur in the future. "This will be a recurring crisis over the next three or four years, simply because we don't have much new natural gas supply coming into the market during that period. By 2025, the situation might change, but I think we will definitely have a few years of high energy prices," he told CNBC's Capital Connection in mid-October. Gorry also pointed to the natural gas bridge, noting that gas demand has been growing "quite rapidly" as countries aim to transition from coal and oil to cleaner energy due to natural gas causing less pollution than coal and oil. However, James Whistler, head of global energy derivatives at ship brokerage firm Simpson Spence Young, disagrees and says prices are unlikely to remain high after this winter. "Will we be in a constant energy crisis for the next three years? Absolutely not. This is a short-term issue. By March or April next year, we will start seeing much more reasonable prices again," Whistler told CNBC's "Street Signs Asia" on Wednesday. Gavin Thompson, vice-chair of Asia Pacific energy at Wood Mackenzie, is also bearish, stating that another energy crisis could lead the world back to oil and coal. "Two weeks ago, we reported that high natural gas prices could lead to a 2mb/day increase in oil demand as power plants switch from nat. gas to oil. While oil prices have rallied, nat. gas prices have recently been trading equivalent to oil at $200/barrel, making it unsustainable for power companies to continue relying on cleaner fuels." That is the end of the report, "Bearish Oil Market: Is It Suddenly Changing?" from GICTrade. Read other complete articles and news on commodities and forex at GIC Journal. Don't forget to earn GICT bonuses by participating in the Friday Barokah event and 100% deposit bonus.