ADVFN Logo ADVFN

We could not find any results for:
Make sure your spelling is correct or try broadening your search.

Trending Now

Toplists

It looks like you aren't logged in.
Click the button below to log in and view your recent history.

Hot Features

Registration Strip Icon for monitor Customisable watchlists with full streaming quotes from leading exchanges, such as LSE, NASDAQ, NYSE, AMEX, Bovespa, BIT and more.

Who leads the oil market now?

Share On Facebook
share on Linkedin
Print

Oil prices dropped by 10% last week, with the news of the North American production being stronger than expected. This news triggered the oil market’s price volatility.

©

The volatility of the international oil markets fell from September 2016 to January 2017. The expected output cuts from OPEC countries including Russia caused the expectancy of crude supply to diminish.

Future outlook of higher prices, higher demand and the world economy recovering from a period of hebetudinous growth moved the price of crude above $50 per barrel and levelled the market’s contago structure.

According to existing fields and future studies, the US is on the rise as the world’s top oil producing country. The expectations of an ascending revision of output are about an increase of 300,000 barrels per day for 2017, followed by a further increase of 500,000 barrels per day in 2018.

In addition, the US has become the producer of the marginal barrel of oil but does not have the capacity to set the price of crude by determining world supply given current demand; like Saudi Arabia dominating the mid-20th century petroleum market.

So; who leads the oil market now? 

Saudi Arabia is still strong-willed enough to protect the OPEC agreement, if not, extend it, in prospect of Aramco’s initial public offering even though the US is limiting OPEC’s price-setting capacity.

The demand for the oil is not expected to crest before the mid-2020s and the late 2030s according to the International Energy Agency.

Thus, it encourages the international oil market to move towards a less inhibited structure of supply determination, resulting in a small-scale price volatility rather than wild swings.

CLICK HERE TO REGISTER FOR FREE ON ADVFN, the world's leading stocks and shares information website, provides the private investor with all the latest high-tech trading tools and includes live price data streaming, stock quotes and the option to access 'Level 2' data on all of the world's key exchanges (LSE, NYSE, NASDAQ, Euronext etc).

This area of the ADVFN.com site is for independent financial commentary. These blogs are provided by independent authors via a common carrier platform and do not represent the opinions of ADVFN Plc. ADVFN Plc does not monitor, approve, endorse or exert editorial control over these articles and does not therefore accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at ADVFN.com is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by ADVFN.COM and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Authors may or may not have positions in stocks that they are discussing but it should be considered very likely that their opinions are aligned with their trading and that they hold positions in companies, forex, commodities and other instruments they discuss.

Leave A Reply

 
Do you want to write for our Newspaper? Get in touch: newspaper@advfn.com