Published By : 10 Nov 2015 | Published By : QYRESEARCH
Oil prices have been receiving a slight boost from traders and their speculation that despite warnings from the International Energy Agency, the market has bottomed. The top energy watchdog warned that the Organization of the Petroleum Exporting Countries’ decision to continue pumping is likely to keep prices down until the end of 2020.
Several traders have been moving on the basis of links with equities and the dollar while others have been expecting restricted growth of the inventory this week, according to a broker and trader. Recently, investors have been reflecting a tendency of betting on the market gaining balance earlier than what consensus expectations recommend, analyst at Simmons & Co. International Bill Herbert said.
He added that the oil market’s rebalancing is already under way. However, there are a lot of factors that can force this to continue in 2017 as well.
Sweet and light crude aimed for delivery next month recently went up by 1 per cent or 42 cents to reach US$ 44.29 per barrel on the New York Mercantile Exchange. The global benchmark Brent rose 0.4 per cent or 19 cents to settle at US$ 47.38 per barrel on ICE Futures Europe.
The International Energy Agency said in its World Energy Outlook that it is possible it could last longer since a persistent switch in the production strategy of Organization of Petroleum Exporting Countries in favor of gaining a larger share of the oil market mix could maintain the Brent crude price at around US$ 50 per barrel through 2020. The International Energy Agency said that under more bullish conditions, oil could go back to US$ 80 or so per barrel by the end of the decade once the glut in the oil market starts to settle.