Crude Oil Likely to Give Back Gains as DOHA Talk Fails - TDS
Research Team at TDS, suggests that with the oil market not getting a
production freeze in DOHA, it is likely that crude oil gives back most
of the gains made in recent days.
Key Quotes
“WTI
can retrace back to the lower bound of the trading range near $35/bbl
and Brent to $37/bbl. Sentiment now has been damaged by renewed Saudi
insistence that Iran join the freeze agreement, hence levels a few
dollars below the recent lower bound are likely as specs strap on
shorts/liquidate over-extended long exposure. Still, improving long
term supply demand fundamentals such as a rather permanent oil
production decline in US shale zones and in other non-conventional
regions suggest that prices are unlikely to test the lows of earlier in
the year.
There is still hope of much higher price near $60/bbls
late in the year as key producers restrain, reach capacity and the
supply-demand moves toward balance amid deep non-conventional declines.
OPEC may even keep the hopes of a freeze alive in June, as by then the
Iranians who already hiked production quite aggressively will be near
the top of capacity and the demand impact from Brexit, China/EM risks
will be clearer.”
