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Mixed views as daily oil price streak breaks 5 year record

Opinion remains divided on oil price movement

US crude oil futures were up 2.2% today at $47.07 per barrel, their highest level since early June, while Brent crude was up 1.9% to $49.68. This is the longest run of consecutive daily increases since 2012.

Across today’s financial and industry media, analysts are agreeing that if the price moves above a certain range it is likely to continue to increase, offering all quarters of the industry some hope that conditions may be on the road to recovery.

Citibank’s assessment is that prices have bottomed out and are set to soar, predicting a 22% increase based on previous short term bottoms.┬áRaymond James insists that oil prices will average $65.00 during the next calendar year.

There are also less optimistic voices. A CNBC survey found that around half of respondents from within the industry believe that there could still be a low point ahead. 80% say that oversupply will remain the key issue for the foreseeable future.

Respondents also expressed a fear that OPEC will continue to talk up the price, jawboning the market for short term boosts, despite the fact that most analysts agreed that OPEC has now lost control of the market.

Goldman Sachs predicted that prices will hover around $47.50 a barrel (down from recent estimates as high as $55.00.) This is a result of Libyan and Nigerian activity, and the increased US rig count. But even this lower figure sits above the current price curve.

Despite wide variations in short term optimism, there are very few voices anticipating a move beyond the $50 range over the course of 2017.

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"The market is moving back toward balance after a long period of oversupply that crushed prices."


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