Yesterday followed the trend we have seen lately with prices continuing to decline. On Wednesday, WTI prices fell below $45 for the first time since March, dropping almost 2% to $44.91/bbl,before closing at $45.15 (the third-lowest finish of 2015). The drop on Wednesday is illustrated in Bloomberg’s chart, below.
HO and RBOB both saw a reversal yesterday. The release of DOE stats caused an initial rally in prices, but the market sold off to finish in negative territory.
Goldman Sachs Group Inc. says crude prices need to remain low for longer to allow the market to find equilibrium amidst a supply glut. They anticipate that if the surplus of crude remains at 2 million bpd storage may be filled by fall. Even if supply and demand balance by 2016, OPEC’s production and the potential lift of Iran’s sanctions may continue to prohibit prices from rebounding.