Oil price Who woulda guessed, five days after the Doha disaster the oil price, despite falling yesterday, is likely to end up the best part of five bucks up on the week? This morning the new June WTI contract is around $44 and Brent is dead on $45, this is despite a strong greenback and handbags about production levels from Russia, Saudi Arabia and Libya. All those countries have said that they will up their production but may not be able to deliver. Most experts tell me that not only is Russia flat out already but the sanctions that prohibit US service companies from assisting their further growth remain in place thus holding or even eroding production. The Saudis could of course ramp up production but with summer approaching unless they do, domestic demand for power generation will take away valuable export barrels. As for Libya it is indeed the dark horse here but I remain unconvinced that there is an imminent increase in supplies available at least in the short term. Finally the team over at the Vampire Squids have said that oil prices must fall in the short term and dont forget that they have a $20 low to achieve…
It is inevitable that some short term traders will bank profits but there are a lot more long term holders who will just sit and wait on the sidelines me included. Apart from anything else, many of those selling today will buy back to try and get another bite of the cherry on the next step of our rise, I still think this will continue its rise later in the day.
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