{"id":7930,"date":"2015-05-08T06:10:30","date_gmt":"2015-05-08T11:10:30","guid":{"rendered":"http:\/\/olduvai.ca\/?p=7930"},"modified":"2015-05-08T06:10:30","modified_gmt":"2015-05-08T11:10:30","slug":"oil-price-recovery-may-be-too-much-too-soon","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=7930","title":{"rendered":"Oil Price Recovery May Be Too Much Too Soon"},"content":{"rendered":"

Oil Price Recovery May Be Too Much Too Soon<\/a><\/h3>\n

Oil prices have hit their highest levels in 2015, with WTI surging above $60 per barrel. Crude oil inventories in the U.S. declined for the first time since December 2014, perhaps indicating that the glut could be easing.<\/p>\n

The EIA\u00a0reported<\/a>\u00a0that oil stockpiles fell by 3.9 million barrels for the week ending on May 1, a larger drop than expected. With\u00a0rig counts falling<\/a>\u00a0by more than half since last year, this could be the beginning of a longer contraction. Both weekly production figures and the stock build appeared to have peaked, suggesting that supplies are adjusting lower and demand is rising.<\/p>\n

\"USCrudeOilStocks\"<\/p>\n

That has oil prices surging from their March lows, with WTI jumping over $15 per barrel, and Brent about $20 per barrel.<\/p>\n

Related:\u00a0Oil Sector May Not Cause Financial Apocalypse After All<\/strong><\/a><\/p>\n

\"WTIPrices\"<\/p>\n

But have the markets overreacted? The rise in oil prices over the last few weeks has been so rapid that few predicted it. Speculators have raised their\u00a0bullish bets<\/a>to the highest level in years. The optimism may not be justified. In the past, bets to such a degree have often been followed by a fallback in prices, the head of commodity strategy at Saxo Bank\u00a0told Reuters in an interview<\/a>. Similarly, the top commodities official at Commerzbank\u00a0told CNBC<\/a>\u00a0that the price rise was \u201cpremature,\u201d and oil prices could dip back below $50 per barrel once the markets come to their senses.<\/p>\n

In other words, the markets may have overshot, rising beyond levels warranted by the underlying fundamentals. Oil inventories are still at 80 year highs. The 487 million barrels of oil sitting in storage will take quite a while to drawdown. Crucially, oil production is\u00a0still exceeding demand<\/a>, leaving oil markets well-supplied.<\/p>\n

 <\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

Oil Price Recovery May Be Too Much Too Soon Oil prices have hit their highest levels in 2015, with WTI surging above $60 per barrel. Crude oil inventories in the U.S. declined for the first time since December 2014, perhaps indicating that the glut could be easing. The EIA\u00a0reported\u00a0that oil stockpiles fell by 3.9 million […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[184,251,267,588,592,1775,5257,1644,2531,1451,895],"class_list":["post-7930","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-crude-oil","tag-eia","tag-energy-information-administration","tag-oil","tag-oil-price","tag-oil-price-collapse","tag-oil-price-recovery","tag-rig-count","tag-us-rig-count","tag-west-texas-intermediate","tag-wti"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7930","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7930"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7930\/revisions"}],"predecessor-version":[{"id":7931,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7930\/revisions\/7931"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7930"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7930"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7930"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}