As in February the oil was crashing and “going extinct” all of the sudden is back at USD$50.
So a new oil market rally?
Not so fast.
The rally in oil has started from some speculative moves and then a few oil disruption (the new Nigeria “Delta Avengers” terror group, the Canadian wildfires between others) helped to shrink reserves and lift prices.
But now Iranian oil production is recovering at a faster pace than expected and the US shale gas rig count has started to increase again.
In essence oil is ranging between two overlapping areas USD27 – USD 43 and then USD 38 to USD 60.
Now we are in the 38-60 area. There could be some weakness, but usually the Northern Hemisphere holiday months (July, August) give support to oil – so any decrease would be probably limited to USD 38 and the target for September could be USD 60.
As the onset of the winter month come, I presume that by end year will be back at around USD50.
In effect I see the oil as ranging between USD38 (or in a panic US32) and a top of USD60 for teh rest of the year.
But now all eyes are on the Brexit referendum
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