Will the Oil Price Rally Last?

2017 fundamentals are far from robust from an oil price perspective, and do not appear supportive of prices moving much above the $50 per barrel threshold

Stephen Simko, CFA 24 August, 2016 | 1:12PM
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Crude markets have rallied a good deal in recent months, as strong oil demand growth and supply issues have pulled forward the industry recovery by about a year compared with the outlook we published in April. Even so, 2017 fundamentals are far from robust from an oil price perspective, and don't appear supportive of prices moving much above the $50 per barrel threshold.

We’re lowering our 2019 oil price forecast to $60 from $65

Another large uptick in rig additions in the U.S. could be enough to eliminate near-term inventory draws altogether, which is the last thing oil markets need for a sustained price recovery to occur.

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About Author

Stephen Simko, CFA  is a senior stock analyst at Morningstar.

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