The New Consensus About The Oil Market

There seems to be a new consensus about the oil market. An increasing amount of traders are expecting mild increases in the price of oil this coming summer. Also with an eye on the rest of the year, a rising oil price is expected on average.

That consensus is completely the opposite of what was expected earlier this year, when rising oil production in the United States and the lack of control of the OPEC to stop this forced the oil price down.

Oil Price

Although Brent is still listed a lot lower than a year ago, the price has experienced a significant revival this year. The revival has been strong enough to convince many market watchers that it will continue. Energy trader Anthony Grisanti expects oil to be traded at 65 to 70 dollars per barrel by the 4^th of July. He is not convinced oil will rise significantly beyond this level.

In Grisanti’s view, the demand for oil products in the summer will drive up the price of the commodity. At a level of 70 dollars per barrel an increase in supply of those that currently have slowed down production, will put a halt to the rise of oil.

Drop in oil production

The same 70 dollar level was also mentioned by Phillip Streible. The sustained drop in the production of oil provides an opportunity that will last until the end of the year, he mentions. He expects the oil price to rise to 70 dollars per barrel as well.

Brian Stutland, a US trader from Chicago, repeated that statement. He believes there is a bullish pattern surfacing in oil, but he believes that 65 to 70 dollars is as far as it goes in the near term as well. That price will cause suppliers to increase output once again, which would be enough of a reason for him to sell at that point.