· International benchmark Brent crude has tumbled nearly 9 percent from last week’s high of more than $79 a barrel. It’s most recent dip comes amid emerging evidence of higher global crude production.
· “Political and economic events are shaping the oil market in a way that they have not shaped for quite some time,” Tamas Varga, senior analyst at PVM Oil Associates, said in a research note published Thursday.
· Still, some investors say a recent dip in crude futures represents a buying opportunity because U.S. sanctions against Iran and other supply disruptions could reignite fears of a supply crunch.
The oil market is likely to become progressively more unpredictable over the coming months, analysts have told CNBC, in the latest sign dynamics shaping crude futures have dramatically shifted since the crude rally began.
International benchmark Brent crude has tumbled nearly 9 percent from last week’s high of more than $79 a barrel. It’s most recent dip comes amid emerging evidence of higher crude production from OPEC kingpin Saudi Arabia and other members of the Middle East-dominated cartel — as well as Russia and the U.S.
“Political and economic events are shaping the oil market in a way that they have not shaped for quite some time,” Tamas Varga, senior analyst at PVM Oil Associates, said in a research note published Thursday.
“The amount of uncertainties surrounding the global supply (and) demand balance is growing almost by the day,” he added.
Saudi Arabia reportedly ratcheted up crude shipments to global markets by almost 400,000 to 7.6 million barrels per day (bpd) last month.
Morgan Stanley: Oil prices to hit $85 by year-end
Still, some investors say a recent dip in crude futures represents a buying opportunity because U.S. sanctions against Iran and other supply disruptions could reignite fears of a supply crunch.
“Oil markets are likely to tighten in coming months (but) despite contradictory signals, our call for $85 a barrel by year-end remains in place,” analysts at Morgan Stanley said.
Meanwhile, the U.S. Energy Information Administration (EIA) said Wednesday that America’s crude output rose beyond 11 million bpd for the first time. A rapid increase in shale drilling has seen the country add almost 1 million bpd since November.
Reference: CNBC
Read More: https://www.cnbc.com/2018/07/19/oil-prices-energy-market-is-becoming-increasingly-dangerous-analysts.html
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