- The recent rise in crude oil prices are poised to continue, eventually to possibly as high as $80-$85/bbl, as there is now a "real rebalancing" in the market, Jodie Gunzberg, head of commodity and real asset indices at S&P Dow Jones Indices, tells CNBC.
- Support is coming from several sources, including OPEC members complying with production cuts and China demand growth, with an added push from refinery disruptions in the wake of Hurricane Harvey, according to Gunzberg.
- "When we look at the index data, we can see the price could move even as high as $80-$85 - not immediately, but with their structural backwardation and shortages in the market, you just can't replenish it overnight," Gunzberg says.
- Ed Morse, Citigroup (NYSE:C)'s global head of commodities research, says a supply gap could emerge in the market as early as 2018, as some nations including Iraq already may be pumping at maximum capacity.
- If production reductions are prolonged, it would only hasten the prospect of a tighter market, Morse says, adding that the source of the supply squeeze likely would be OPEC rather than producers outside the group since “there’s no room for them to do more."
- ETFs: USO, OIL, UWT, UCO, DWT, SCO, BNO, DBO, DTO, USL, DNO, OLO, SZO, OLEM, OILK, WTIU, OILX, WTID, USOI
- Now read: President Trump Validates Iran War Thesis And More Expensive Oil
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"Real rebalancing" could lift oil prices to $80/bbl, S&P commodity chief says
Published 09/27/2017, 12:59 PM
"Real rebalancing" could lift oil prices to $80/bbl, S&P commodity chief says
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