Analysts Look at Oil Price Rise
by Andreas Exarheas
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas
Crude is trading higher today due to ongoing disruption in Libyan oil flows, as the UN was unable to reach an agreement over the weekend.
That’s what Rebecca Babin, a senior equity trader for CIBC Private Wealth in New York, told Rigzone, adding that, “with bearish market positioning, there is limited supply to cover shorts, further supporting the rally”.
Brian Leisen, a Global Oil Analyst at RBC Capital Markets, told Rigzone he doesn’t think there is anything fundamental driving price action today.
“A lot of the focus since Friday and over the weekend has been on positioning and trade flows, which have been extremely negative,” he said.
“Seeing a bounce in spot prices today is more of a function of being sold down so heavily this month,” he added.
“From a physical perspective we’ve seen mixed reactions from the recent sell off, with some grades still having trouble finding a bid, but there have been green shoots for some grades now pricing competitively enough to get a positive reaction from traders, indicating a near term fundamental floor for crude prices,” Leisen went on to state.
In a market comment sent to Rigzone on September 12, Rania Gule, a Senior Market Analyst at XS.com, said oil prices will continue to experience significant volatility in the near term.
“The ongoing strength of the U.S. dollar, disruptions from natural factors such as tropical storms, and geopolitical tensions and production interruptions in key countries all contribute to market instability,” Gule said in the comment.
“However, a sharp collapse in prices seems unlikely, especially if OPEC continues to adjust production in line with global demand,” Gule added.
“The big question remains how the market will respond to forthcoming geopolitical and economic events, and whether major economies will face sharp slowdowns affecting global oil demand,” Gule continued.
The U.S. Energy Information Administration (EIA) reduced its Brent and WTI spot price forecasts for 2024 and 2025 in its latest short term energy outlook (STEO), which was released recently.
According to its September STEO, the EIA now sees the Brent spot price averaging $82.80 per barrel this year and $84.09 per barrel next year and the WTI spot price averaging $78.80 per barrel in 2024 and $79.63 per barrel in 2025.
In its previous August STEO, the EIA projected that the Brent spot price would average $84.44 per barrel in 2024 and $85.71 per barrel in 2025. That STEO forecast that the WTI spot price would average $80.21 per barrel this year and $81.21 per barrel next year.
by Andreas Exarheas
click here to read this article at Rigzone.com
*this article was not written by Roseland Oil & Gas