Prices of near-term contracts for benchmark Brent crude futures should rise near $60 around year's end, according to Citigroup's Christopher Main. This year, there has been a lot of volatility in the energies markets with various players being involved.
At the beginning of the year, they however raised hopes that the market would recover this year.
Crude prices fell from over $100 per barrel in summer 2014 to under $40 a barrel in early 2016.
"The pendulum between shale and OPEC has shifted wildly over the past five years..." So what's been happening?
Rising output from OPEC members Nigeria and Libya, which are exempt from the output reduction deal, is also undercutting attempts to limit production. "That's consistent with my sense that this is all about inventories and the associated supply overhang in crude oil markets at the moment", said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
But the cutbacks have yet to drain inventories significantly and prices fell sharply after the OPEC deal was announced.More news: Wrong number text leads to free Stanley Cup tickets
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Iraq agreed in the OPEC deal to cut output by 210,000 barrels a day from its October level. It just transfers those jobs out of America and the United States and ships them to foreign countries.
OPEC chose to extend the current production cuts for another nine months up to March 2018. Refining runs came in at a record as refiners ran 17.5 million barrels of crude operating at 95% of capacity.
So, why is predicting market direction so hard?
Meanwhile, Nigerian crude differentials were under pressure on Thursday from the prospect of more plentiful supplies due to the return of Forcados exports.
"The ongoing threat to investor sentiment when it comes to the oil markets is that no matter what OPEC try to do to rebalance the ongoing oversupply in the markets, US Shale producers will be able to offset the efforts by increasing inventories from their side". OPEC has become the swing producer of the world because other producers have figured out how to lower their costs and increase their efficiency and get more oil out of the ground profitably at $50. Mexico already does this to the tune of 250 million barrels a year with Wall Street hedge funds through options. Cool temps cause a higher than expected 81bcf increase into natural gas storage, but predictions of an active hurricane season and a return to warmer weather may start to support prices.