To no surprise, the world of oil seems to be primarily focused on where prices are headed next. Since oil prices have been range-bound for quite some time now, the question at hand is, can we expect to see significant upside/downside in the market, or will crude be stuck in limbo between $50-60 indefinitely?
What Do We Know?
- Bullish pressure: OPEC’s rhetoric regarding production cuts is helping hold the current price floor
- OPEC rhetoric / production data has counter-acted any major bearish sediment in the marketplace
- When news of increased drilling / production comes, OPEC seems to find a way to keep prices from falling significantly below current levels
- Bearish pressure: Rig count continues to climb in the United States. This means more production, which in turn can bring excess product to market
- Despite excess product continuing to build in the market, the bears are having a tough time keeping the bulls in their respective stables
What are The Expects Saying?
- Crude could rise to $70 per barrel by end of year (Citibank)
- Shale play in the U.S. is setting the price ceiling / OPEC is setting the price floor (Bloomberg)
- Crude could fall to $30 per barrel, if OPEC does not extend production cuts (ABN Amro Bank)
What Else Is Good to Know?
- Futures Trading (NY) is trading within tightest range in 13 years
- Brent Crude volatility is nearing the lowest point in 2 years