Will the rally continue for oil prices? Angel Commodities Broking

Views by Mr. Prathamesh Mallya (Chief Analyst - Non-Agri Commodities & Currencies, Angel Commodities Broking):

"Crude oil prices have rallied at a fast pace in the recent weeks with NYMEX and Brent trading at $55 and $61/bbl mark at present. Efforts and commitment by the OPEC members to balance the oil markets by adjusting the output quotas plus the disturbance and uncertain environment in IRAQ and its production have ensured that the prices move higher.

However, the efforts by the OPEC is a boon for shale producers in the US as they have increased crude exports to close to 2 million barrels per day (bpd) and production has risen almost 13 percent since mid-2016 to 9.5 million bpd.

The conundrum still continues as the oil markets still beleives that the glut will continue till the second half of 2018 which makes the price rise in the recent weeks a big question mark and the sustainability of that price.

Whatever the situation is, a word of caution is advised while trading in oil. With a risk pack full of events lined up this week whether it is the central bank meetings, the Non Farm Payrolls data from the US, the oil inventory data from the US, and the direction of oil prices will remain volatile in the weeks ahead. We might see correction in the counter to around Rs.3450/bbl mark while WTI crude may move lower towards $52 mark (CMP: $55/bbl)."

Source : Equity Bulls

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