Oil Price Outlook: $55 a Barrel?

Nothing is ever certain in the world of oil, but a crude awakening for energy investors could very well be near at hand

Joe Gemino 18 January, 2018 | 11:37AM

Oil prices may fall

Oil fundamentals look healthier than they’ve been for years, largely due to voluntary curtailments from OPEC and its partners. By giving up 1.8 million barrels per day, combined, this group has engineered a temporary supply shortage in an effort to realign global inventories with the long-term average before the cuts expire at the end of 2018.

As many expected, OPEC announced on November 30 that it will extend its crude-oil production cuts through the end of 2018. The impact of these cuts will fall short of what the cartel and its partners are hoping for, however. Several months of stagnating shale growth, driven by a sharp increase in drilled-but-uncompleted wells and the fallout from Hurricane Harvey, have lulled oil markets into a false sense of security.

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Joe Gemino  is an equity analyst at Morningstar

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