Oil prices remain extraordinarily low, having collapsed over the past 15 months as a result of a multi-year surge in U.S. shale production, OPEC’s abandonment of its role as “swing producer” and decelerating emerging market demand growth. As market supply adjusts in response to lower prices and demand becomes more robust, the ingredients for higher oil prices are beginning to fall into place, though the timing of a resolution remains a question. Barring further unforeseen developments, the oil market is on track to normalize by 2017, permitting a gradual increase in the price of oil. However, there are a number of risks that extend in both directions. Global demand for oil is now growing robustly, and expectations have been repeatedly ratcheted higher in 2015. Meanwhile, global supply growth is finally halting. In so doing, the market is gradually righting itself back to equilibrium

To learn more please see the following article: http://acafinancial.ca/wp-content/uploads/2016/01/checking-in-on-oil-markets.pdf

Leave a reply