Oil Prices

[dan_s]

I believe oil supply / demand fundamentals will balance in the 3rd quarter. What worries me is the strength of the U.S. dollar.

See: http://www.marketwatch.com/investing/index/dxy/charts

Crude oil trades in U.S. dollars. As the dollar goes up, oil prices go down.

The large amount of oil in U.S. storage is a bit of a concern, but not that big of a deal in a world that consumes 94 million bbls per day of refined products. A lot of the oil in storage is now owned by funds and individuals that just want to own physical oil. As long as we are in contango, the amount of oil in storage will remain high.

Regarding supply/demand see: https://www.iea.org/oilmarketreport/omrpublic/

Global demand is set to spike by over 1.5 million bbls per day in Q3, which will balance the physical market. I also think OPEC may cut back at their June meeting. Russian supply is also going to decline as a result of lower oil prices.