According to analysts from Danske Bank, supply and demand dynamics suggests that the price of crude oil may fall further near term.
Key Quotes:
“The oil price grabbed the headlines again this week, reaching the lowest level since November last year. As usual, there is lot of attention on oil supply stories with increasing production out of Libya catching the headlines.”
“We have yet to see a significant cut in the number of US rig counts, while US oil production appears to be topping out. From the supply side there is hence nothing to suggest that the oil price should stabilise just yet. Moreover, the oil price is in our view primarily reacting to slowing global demand, particularly in China and the US. The speculative community is still long oil according to IMM data. We could see the oil price fall further in coming weeks.”
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