WTI oil prices might reach $40 but first we may see a reversal – TD Securities
Despite the sharp decline on crude inventories reported by the EIA, the FX & Commodities Strategy Team at TD Securities affirm that oil prices might face headwinds to extend their last month’s rally. WTI prices are likely to reach the $40 target although they warn about the possibility of a reversal first.
“The overall Petroleum Status Report was mixed. This suggests that there is not enough good news to lift crude higher, after nearly a 70% jump from early-May levels.”
"At this point, the market is pricing in a very optimistic scenario on both sides of the supply-demand equation. As such, a modest reversal is quite possible too.”
“The combination of additional cuts from key producers likely means that the massive inventory accumulations will clear by year-end. This will likely mean that WTI crude may well reach our $40s target months ahead of schedule, but first, there may well be a modest reversal.”
Author
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
