6 Mar 2015
Oil prices set to decline – KBC
FXStreet (Barcelona) - The KBC Bank Research Team maintains a negative bias on oil prices, and highlights the key reasons behind the bearish view.
Key Quotes
“After failing to settle above a resistance at 62.5 USD/bbl, the oil price is set to decline this week. Still, being traded at about 61 USD/bbl, oil is seen well above levels recorded after the release of the US weekly oil stock report on Wednesday.”
“Regarding the report, it showed yet another sharp increase in US commercial crude oil inventories. In fact, US commercial crude oil stocks may have increased at the fastest pace since March 1990 (weekly data may be revised along with the release of a monthly report).”
“In any case, if we take into account that stocks of products also increased more than expected, this leads us to maintain our short-term negative bias on oil prices.”
“Still, there’s no doubt that apart from today’s US labour market data (which may in our view rather weigh on oil prices), market will also pay close attention to the Baker Hughes’ Rig Count report”
“As for more recent news, Libya halted production at eleven oil fields due to attacks of IS militants and the country’s oil output is reported to be around 400 thousand barrels per day (which is well below Gaddafi’s era level).”
“Although the spread between the front and twelve month contract on Brent (ICE) has tightened over the past few weeks, the overall situation remains calm and market seems to remain (more than) well supplied.”
Key Quotes
“After failing to settle above a resistance at 62.5 USD/bbl, the oil price is set to decline this week. Still, being traded at about 61 USD/bbl, oil is seen well above levels recorded after the release of the US weekly oil stock report on Wednesday.”
“Regarding the report, it showed yet another sharp increase in US commercial crude oil inventories. In fact, US commercial crude oil stocks may have increased at the fastest pace since March 1990 (weekly data may be revised along with the release of a monthly report).”
“In any case, if we take into account that stocks of products also increased more than expected, this leads us to maintain our short-term negative bias on oil prices.”
“Still, there’s no doubt that apart from today’s US labour market data (which may in our view rather weigh on oil prices), market will also pay close attention to the Baker Hughes’ Rig Count report”
“As for more recent news, Libya halted production at eleven oil fields due to attacks of IS militants and the country’s oil output is reported to be around 400 thousand barrels per day (which is well below Gaddafi’s era level).”
“Although the spread between the front and twelve month contract on Brent (ICE) has tightened over the past few weeks, the overall situation remains calm and market seems to remain (more than) well supplied.”