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22 May 2015
Bearish outlook for oil remains – KBC
FXStreet (Barcelona) - With Brent posting gains for the tenth consecutive week, the KBC Bank Research Team warns that the upside in oil prices stands limited and the probability of a fall is high.
Key Quotes
“The price of Brent increased the most in the last seven sessions yesterday as news about continuing drawdown of stocks in the US supported oil prices in general (WTI is set to post gains in the tenth consecutive week); US commercial crude inventories have been falling in the last three weeks, but from month-on-month perspective, the decline in May has so far been quite small (and therefore broadly in line with seasonal pattern). Moreover, let us recall that the stocks have been falling from their all-time record highs.”
“News from Middle East could also have supported the price but we perceive the impact as rather negligible due to generally calm situation in the markets (BFOE CFD curve has been in permanent contango since July last year).”
“As we already pointed out, we believe that the latitude for a possible increase in oil prices is limited and we still expect the price of oil to fall rather than rise.”
Key Quotes
“The price of Brent increased the most in the last seven sessions yesterday as news about continuing drawdown of stocks in the US supported oil prices in general (WTI is set to post gains in the tenth consecutive week); US commercial crude inventories have been falling in the last three weeks, but from month-on-month perspective, the decline in May has so far been quite small (and therefore broadly in line with seasonal pattern). Moreover, let us recall that the stocks have been falling from their all-time record highs.”
“News from Middle East could also have supported the price but we perceive the impact as rather negligible due to generally calm situation in the markets (BFOE CFD curve has been in permanent contango since July last year).”
“As we already pointed out, we believe that the latitude for a possible increase in oil prices is limited and we still expect the price of oil to fall rather than rise.”