Oil Rally May Have Bypassed Fundamentals
In this preview of what to watch in the oil market this week, one of Rigzone’s regular market-watchers anticipates a rally – but not for oil prices. Keep reading to find out which commodities could get more expensive this week, along with other insights from some of Rigzone’s prognosticators.
Andrew Goldstein, President, Atlas Commodities LLC: I look for precious metals to rally as the price of energies falls due to the number of COVID-19 cases rising in numerous states. Many feel that the rally in oil prices has gotten ahead of the fundamentals. Due to that and a great deal of indecisiveness on whether the economy continues its rapid recovery, I foresee much hesitation in the energy markets in the coming weeks.
Tom McNulty, Houston-based Principal and Energy Practice leader with Valuescope, Inc.: The velocity with which producers have been able to cut output has been tested, and they have passed. I expect oil to trade in this current range for the near term because of producer behavior. Sharp moves up will bring production back online in the U.S., pulling prices back down quickly.
Mark Le Dain, vice president of strategy with the oil and gas data firm Validere: The Saudi deliveries set in motion long ago will no longer be the driving factor in this upcoming (U.S. Energy Information Administration weekly) crude storage report as they were previously. This should result in a more manageable report.
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