As this week comes to a close, there is a bullish sentiment when it comes to crude. We are set for the biggest weekly rise in Brent crude since 2009. It is projected to rise 12% this week. U.S. crude was up $1, or 2 percent, at $50.43/bbl, the highest level in more than 2 months.
Reuters reported that the PIRA Energy Group issued a bullish expectation for the market from now until 2017. They expect oil prices to reach $70/bbl by the end of 2016 and $75/bbl by 2017, running contrary to market consensus for a prolonged period of lower prices which will eventually slow production growth and increase consumption to rebalance markets. PIRA’s projection is interesting considering we are in an oversupplied global market.
Analysts at Swiss-based consulting company Petromatrix took a different approach regarding further commodity gains, stating that “crude can stabilize at $50/bbl WTI front anchor but to gain another $10 it will need some support from products and that is not currently the case.” There continue to be differing opinions on the future direction of the market.
Some world news that could ultimately be the drivers of this market:
- An Iranian Revolutionary Guards general was killed, as tensions rise in Syria.
- Earlier this week, Baker Hughes announced that the international rig count for September 2015 was 1,140, up 3 from 1,137 in August 2015, and down 183 from 1,323 in September 2014.
- European Gasoline exports rose, resulting in inventories dropping by 69,000 metric tons to 861,000 metric tons as refinery maintenance in Asia and Middle East pulled barrels from the hub.
- The FED’s FOMC meeting showed more policymakers than expected agreed to keep the first interest rate hike in a decade on hold.