+357 25 105 641
Oil to remain pressured.
Published on 25.04.2017 19:26

The oil price is under further pressure today, racking up its 7th straight day of losses as concerns continue about the current oversupply in the market.

After the first round of production cuts by OPEC and Non OPEC members such as Russia, oil enjoyed significant gains, jumping by as much as $10 a barrel but all that started to unwind when more US oil Drillers entered the market to take advantage of the higher prices.

“The premature bullishness we saw in early 2017 has had a reality check,” says David Fyfe, chief economist at oil trader Gunvor Group.

“The market has been a bit spooked by persistently high stocks.” He added.

It is estimated that only 70 percent of oil rigs in the US are functional at the moment which means a potential 30percent more could enter the market putting further pressure on the oil price as more of the commodity hits the market,

“Until the trend, and specifically the pace of rising US production, slows or reverses, it will be very difficult for oil prices to sustain any material gains in the medium term,” said Tyler Richey, co-editor of the respected Sevens Report.

OPEC next meets in May, where they are expected to extend production cuts in order to shore up the oil price but there is no guarantees that Non OPEC members will agree to further reductions, and if a deal doesn’t go through, analysts expect the losses to keep piling up further. 

 

 

 

The material published in on this page is produced by the FIBO group companies, and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Andrew Masters

Analyst

The world of trading has no boundaries
×

Risk warning: Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, your level of experience and preparation of taking risk. The possibility exists that you could sustain a loss of some or of all of your initial investments and therefore you should not risk more than you are prepared to lose. Please seek independent financial advice if necessary.

Important notice
By clicking "Continue" you will be redirected to the website operated by FIBO Group, LTD company registered in BVI and regulated by FSC. Click "Cancel" to remain on this page.