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31 Dec 2014
Is Black Gold approaching a bottom?
FXStreet (Guatemala) - After sliding from $55bbl to $52.70bbl, WTI has stabilized having drifted from the lows overnight and into a consolidation below $54bbl.
Oil climbed in the US for the first time over the Christmas break due to the militant action in Libya where attacks have been shifted to major energy facilities which supports the price of oil, given the nation holds Africa’s largest oil reserves.
Meanwhile, these are the lowest levels for five years, levels where drillers are idling the most rigs since 2012. At these prices, it is prompting U.S. producers to plan spending cuts due to falling margins. Moreover, there have not been signs of a bottom as yet, and U.S. stockpiles have been projected to have climbed 900,000 bbls to 388.1 million bbls last week, being the highest for the period in data going back to 1982.
However, as companies start to reduce spending and drilling in 2015, production growth may start to slow. Meanwhile, OPEC stays put while remaining confident that prices of the black gold will come back into line as global economic growth boosts global demand.
Oil climbed in the US for the first time over the Christmas break due to the militant action in Libya where attacks have been shifted to major energy facilities which supports the price of oil, given the nation holds Africa’s largest oil reserves.
Meanwhile, these are the lowest levels for five years, levels where drillers are idling the most rigs since 2012. At these prices, it is prompting U.S. producers to plan spending cuts due to falling margins. Moreover, there have not been signs of a bottom as yet, and U.S. stockpiles have been projected to have climbed 900,000 bbls to 388.1 million bbls last week, being the highest for the period in data going back to 1982.
However, as companies start to reduce spending and drilling in 2015, production growth may start to slow. Meanwhile, OPEC stays put while remaining confident that prices of the black gold will come back into line as global economic growth boosts global demand.