Oil Prices Anticipated To Rally This Year: Analysts

Oil Prices Anticipated To Rally This Year: Analysts
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Saga Nagoya Securities has recently stated that Oil prices were trading higher while profit-‎taking following last week’s rally offset the support from the possibility of ‎supply disruptions.‎

Key analysts from Saga Nagoya Securities highlighted the fact that Crude futures on Thursday marked their highest close in more than three years, as ‎rising tensions in the Middle East and OPEC’s commitment to rebalance ‎the market continued to feed price climbs for the second consecutive ‎month.‎

O‎il has enjoyed a big bull run in 2017, having risen by 25 per cent so far, but market participants are ‎likely to deal with increased volatility in the months ahead as a broad ‎range of political, economic and financial ‎events unfolds.‎

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The brisk rally in crude prices also came on U.S. administration’s desire ‎to tear up the Iran nuclear deal, with forecasts clustered in a range of $50-$60 have now widened to $80-$90 for the second half of this year.

Such concerns compounded existing supply worries ‎which are heightened by plans of OPEC and its allies to maintain oil production cuts until ‎‎2019, extending their campaign to wrest back control of the global market.‎

Jonathan Richards, Head of Corporate Trading at Saga Nagoya Securities commented “The option of prolonging the ‎deal until next year is currently on the cards as a resultant gain of almost 30 ‎per cent since June means that most players will not take the risk of spooking the ‎market.”‎

Favorable economic conditions around the world are also supporting demand, thus a repeat of sanctions would double the expected ‎supply deficit by the end of 2018.

Nevertheless, bullish sentiments over the outlook for oil prices might be ‎contained by the rising U.S. oil production which is set to grow further in the ‎coming months. The increase in supplies could see oil prices ‎struggling to rise significantly in the long term, although short-term price expectations have become anchored around $70 per barrel.

‎”Once these events pass, Oil traders will shift focus to the major ‎fundamentals where the market is more concerned about fresh signs of ‎rising oil production in the U.S. other than the Mideast geopolitical ‎tensions,” added Jonathan Richards, Head of Corporate Trading at Saga Nagoya Securities.

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