Good morning; here's what the Oilman has for you today:

• Analysts See Higher Oil Prices. Traders Beg to Differ.

• Russia, China Forge Closer Energy Ties

• Tweet of the Day

Analysts See Higher Oil Prices. Traders Beg to Differ.

Oil prices have shed close to 15% since the start of March. If you ask analysts, they’ll tell you this is temporary, and prices will surely rise anytime now.

But trading data tells another story. It is a story of fear and uncertainty about the immediate future. And that story suggests “anytime now,” maybe a while yet.

It’s the banks, stupid

The SVB and the Signature Bank collapses frightened oil traders into dumping their bullish positions en masse. Then Credit Suisse almost followed the two unfortunate U.S. lenders.

The last-second save by UBS prevented a meltdown, but it didn’t convince oil traders that all is well.

Neither did central banks after the Fed hiked rates once again, and others followed suit.

Fears of a recession continue reigning supreme on the oil futures market, keeping oil prices low.

Fundamentals? Who cares about fundamentals?

All this is happening amid an OPEC+ stubbornly sticking to its output curbs and multiplying signs from the U.S. industry that production growth this year will be nothing to write home about.

This is what makes analysts so confident that prices will rebound at some point in the not-too-distant future. By the end of the year, in fact. In the second half, for sure.

The fundamentals point this way:

• China is reopening

• Aramco just closed a new $10-billion refinery deal with Sinopec,

• U.S. gasoline prices are down by almost a dollar since this time last year

But nobody cares about fundamentals.

Oil will probably remain depressed until central banks somehow convince market players that all is well. But they have to say it like they mean it.

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Russia, China Forge Closer Energy Ties

Russia is going to supply more of China’s oil and gas going forward. This is what became clear during last week’s meeting between Vladimir Putin and Xi Jinping in Moscow.

Russia will also use the Chinese currency more often in bilateral and international trade, the two leaders agreed.

It’s only shocking if you haven’t been paying attention

Russia and China have been forging closer ties in energy and elsewhere for years now. The agreement on furthering these ties in energy was a logical continuation of this process.

Russia became China’s top oil supplier in the first two months of the year, overtaking Saudi Arabia. March shipments could hit a record high.

Russia also pumped record volumes of gas via the Power of Siberia pipeline and eyes a final agreement on Power of Siberia-2 later this year.

The value of China’s energy imports from Russia has swelled to $88 billion since the Russian invasion of the Ukraine.

Ignore the pivot at your own peril

The mainstream media in the West have tried to downplay the significance of this latest step by noting China did not make specific commitments on Power of Siberia-2.

It’s true that Xi stopped short of making any definitive commitments. The reason: the Chinese leader is a pragmatic one and is well aware of the importance of energy supply diversification.

Another thing Xi is aware of is security of supply, unlike so many of his European peers.

This means that despite the absence of a definitive Power of Siberia-2 commitment from China, Beijing and Moscow will keep getting closer in energy and everything else – including geopolitics.

Russia has the fossil fuels. China has the demand. It’s as simple as that.

What’s complicated is the question: “What is the West going to do about it?”

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