Growth in oil in recent weeks has been strongest in three years, with Brent crossing the psychological limit of $60 a barrel. It seems that the latest statements from Saudi Arabia are key to the price of black gold. The latest decision of OPEC members to extend the period of abstraction after March 2018. led to strong oil growth and proved decisive for rebalancing the market. On the other hand, rising tensions in the Iraqi regions from where major oil pipelines pass give additional impetus to the price. To a large extent, the United States has also had a major influence on the oil price cut so far, the country has managed to compensate for all cuts by OPEC countries through shale oil extraction and a steady increase in oil platforms.
Given the current US technology used for shale gas production, our expectation is that WTI will not transfer the $55/$60 barrel barrier, as the price above it fully justifies investment in new shale platforms that will make world- and hence the levels of oil stocks.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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