The oil price rally that began a year ago is at a crossroad. In February, WTI futures fell from a 3-year high of more than $66 to less than $60 per barrel but have since recovered almost 70 percent of that value. Was this a temporary adjustment on the long march to $70 oil or have prices reached a ceiling at around $65 per barrel? Oil Price Recovery 2017-2018 WTI averaged about $42 per barrel in the 12 months before OPEC+ production cuts began in November 2016. Prices increased immediately to more than $50 based on false expectations that oil markets would balance quickly (Figure 1). By March 2017, concerns developed that the cuts would not work and prices fell back to pre-cut levels by June. (Click to enlarge) Figure 1. More Than 50 percent WTI Price Recovery in 2017 & Early 2018 From $42.19 Avg Price For The […]

Posted in: p-