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Daily outlook for crude oil prices: Commerzbank

Quotes from Commerzbank Corporates & Markets:

-The considerable fluctuations in the prices of the two oil types WTI and Brent of late are due in part to the fact that they are both trading close to their psychologically important thresholds of $50 and $60 per barrel respectively. We expect oil prices to continue their downswing in the short to medium term, for there is no fundamental justification as yet for any sustained price rise. 

-The fact that Ecuador is now also praying for an extraordinary OPEC meeting, Nigeria having already spoken out in favour of this, merely illustrates the desperation some OPEC countries are feeling in view of the massive price slump. We are confident that no such meeting will be held. After all, the strategy pursued by the key OPEC players in the Arab Gulf is to put the brakes on non-OPEC production growth in a bid to defend their own market shares.

-Any voluntary reduction in OPEC production would be counterproductive and is therefore unlikely. Clearly the market is still oversupplied, and US oil production continues to grow unperturbed. According to the API, US crude oil stocks climbed by an additional 8.9 million barrels last week after already rising by 14.3 million barrels in the previous week.

-The US Department of Energy had reported an increase of "only" 7.7 million barrels for the week before last, while a rise of 3.7 million barrels is envisaged for last week. In other words, the market could once again find itself negatively surprised. That said, it should be noted that the high inventory build is partly due to the strike by refinery workers, which is preventing crude oil - the primary product - from being processed. 

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