But JPMorgan has retained its more bullish forecasts for prices in the fourth quarter and is still anticipating Brent will strengthen to an average of $US56.75 in 2017. The fear is that the backlog will force refiners to dial back their demand for oil, deepening crude stockpiles. Also yesterday, Iran’s oil minister said the oil market was oversupplied but said balance between demand and supply will be restored, Iranian state television reported.
Advertisement
That’s why Moors just recommended an oil exchange-traded fund (ETF) whose top four holdings are projected to return a combined 51.1% in the next 12 months. News that the U.S. economy grew slower than expected in April-June also raised questions about demand in the world’s biggest oil consumer.
Global benchmark Brent crude was trading up 87 cents at $43.01 a barrel at 1.54pm GMT, after touching a session high of $43.18.
Oil prices are now in a bear market after dropping by over 20% from their recent June highs.
Local oil producers remain cautious in the outlook for prices, with Beach Energy chief executive Matt Kay saying last week that the market was not necessarily “fully out of the woods yet”.
NEW YORK, Aug 2 (Reuters) – U.S. crude oil fell on Tuesday to end below $40 a barrel for the first time since April as persistent worries of both a crude and refined fuel glut and a slide in U.S. equities offset an early boost from a weak dollar.
Take on Wall Street and Win: It’s no secret the Wall Street system is rigged. Ultimately, this is a market that should only offer selling opportunities with any great ability, and that’s exactly how I’m going to continue to short.
Sagging oil prices notwithstanding, traders kicked off the month on an unfavourable note across most commodities and equity markets. When prices are falling, they bet next month’s contract will be cheaper.
In other words, the presumption of the oil traders is causing the sell-off rather than oil itself.
The price of many United States and global oil companies took a hit overnight, so the prices of Woodside, Santos, Origin Energy and Oil Search will all take a hit today. Gas prices dropped to an average of $2.13 a gallon on Monday, compared with $2.66 this time past year, according to AAA. Jeff Mower, an oil editor for the Americas at S&P Global Platts said through an emailed report that recovery may be “getting kicked down the road a bit”.
Advertisement
The Brent Oil has decreased further inside the minor descending pitchfork, has retested the lower median line of this pitchfork, is pressuring the dynamic support right now.
