Oil to remain capped at $50

6 September, 2017

Oil to remain capped at $50

The oil price is making another run for the $50 mark today over concerns about the damage that Hurricane Harvey has caused, but below it will struggle to break through this level as the disruption to supply is not as bad as first thought

RBC global head of commodity strategy Helima Croft noted that in the past, natural disasters like hurricanes had a bigger effect on the supply of oil as a larger portion of production came from the Gulf of Mexico

The amount of oil production now coming from the gulf is around 15 percent, well down from an earlier figure of 30 percent on the back of different production methods such as shale oil production,

"We think the developments for crude still look pretty bearish because of how many barrels are simply backing up with these refineries being offline," Croft said

"That's probably going to sort of cap whether or not WTI can break through $50 for a while, barring any sort of major outside catalysts." She added.

At around $50 a barrel, the big oil production companies won’t be too concerned said analysts at Goldman Sachs because at this price, oil is more profitable than it was at $100 due to reduced drilling costs and lower overheads,

“Simplification, standardization and deflation are repositioning the oil industry for better profitability and cash generation in the current environment than in 2013-14 when the oil price was above $100 a barrel,” they said

Source link  
Gold remained largely range bound

Gold has remained largely range bound over the past 4 trading sessions but it seems as the today there is momentum gaining to the upside and the formation...

Stagflation a threat to US dollar

The US dollar jumped suddenly after yesterday’s release of better than expected inflation data and then suddenly reversed into negative territory which...

Gold made a run for the $1365 mark

If we look at the arrow on the weekly gold price chart we can see that a resistance point that was first encountered in around august of last year...

Gold awaits direction of Stockmarket

The gold price has remained in a tight range over the last 3 trading sessions as equity markets in the US continue to swing wildly and are now down...

US dollar in for a tough year

The US dollar finished off 2017 mostly weaker against the major currencies despite 3 rate hikes from the US Federal Reserve and although...

RBA misleads investors on AUD

The Australian dollar has dropped sharply in today's Asian trading session on the back of disappointing data and throws into question yesterday...

Brexit doubts pressure pound

The British pound has enjoyed a good run against its US counterpart ever since rumors spread that the EU and the UK were close to reaching a deal...

Gold steady ahead of key news

The gold price is trading slightly higher today as the market awaits the senate testimony later today from Jeremy Powell who is Donald...

Gold looks to go past $1300

The gold price remains well supported today after yesterday’s stellar gains on the back of a less than convincing speech from The US Federal Reserve...