Oil is traded below $57 per barrel after the International Energy Agency said parts of OPEC current cuts would be dropped and the US would increase its share in shale oil production. While OPEC and other producer countries are trying to reduce supply, the US is struggling to gain maximum market share. Last week, US production climbed to the highest for more than three decades.
OPEC predicts that the world oil market will not be able to stabilize, while the US, Canada and other countries that increase their exports do not reduce their output and exports. Despite the fall in oil prices in recent days, considering the bad prospects, we think it is still high.
Our expectations for the future are that the price will drop to the key level of $55, where shale oil yields become profitable. We expect the range between $55 and $59 to predominate for most of 2018.
Source: Bloomberg Pro Terminal
Jr Trader Petar Milanov
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