What happens next?
Posted: Fri May 19, 2017 11:09 am
Read this first: http://www.oilandgas360.com/wti-stays-n ... e-enercom/
EnerCom's opinion is that oil prices won't react that much to what OPEC does next week. I would agree with their conclusion if oil prices were set by logical business people thinking long-term. However, oil prices are controlled by "speculators" who trade billions of "paper barrels" each week on the futures market. There are many factors that go into their thinking besides just supply/demand fundamentals.
My guess is that the "Shorts" will throw in the towel if OPEC and the group lead by Russia formally announce extension of their agreements to hold down production next week. However, there is VERY STRONG resistance at $55/Bbl for WTI. I think it will take steady declines in OECD oil and refined product inventories to push oil beyond $55. The best thing we have going is the big spike in demand for refined products coming this summer.
The best news coming on May 25th is if OPEC formally extends the agreement to March 31, 2018. That will get us past the annual Q1 dip in demand.
EnerCom's opinion is that oil prices won't react that much to what OPEC does next week. I would agree with their conclusion if oil prices were set by logical business people thinking long-term. However, oil prices are controlled by "speculators" who trade billions of "paper barrels" each week on the futures market. There are many factors that go into their thinking besides just supply/demand fundamentals.
My guess is that the "Shorts" will throw in the towel if OPEC and the group lead by Russia formally announce extension of their agreements to hold down production next week. However, there is VERY STRONG resistance at $55/Bbl for WTI. I think it will take steady declines in OECD oil and refined product inventories to push oil beyond $55. The best thing we have going is the big spike in demand for refined products coming this summer.
The best news coming on May 25th is if OPEC formally extends the agreement to March 31, 2018. That will get us past the annual Q1 dip in demand.