$70 Oil Is Right Around the Corner
By Nick Cunningham – Mar 04, 2019, 6:00 PM CSTJoin Our Community
Oil traders are taking on an “overly bearish tone,” paying too much attention to Trump’s tweets, macroeconomic fragility and expected U.S. shale growth.
“We think more critical and bullish determinants of the oil price and oil price volatility in the year ahead are worth reviewing,” Barclays wrote in a March 3 report. While there are plenty of signs that the global economy is slowing – weak car sales and manufacturing data from China, flat growth in Europe, and a slowing GDP rate in the fourth quarter for the U.S. – oil demand has held steady.
“We retain our more bullish view of $70 Brent for the year, but we are not taking it easy like President Trump and Minister Al-Falih and see new risks to the downside. We think the biggest source of uncertainty for oil markets this year is not the US, but OPEC’s response to US policy decisions,” Barclays said. The bank says that there is a “tight price range where both are happy.”