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Breakeven price moves down-II: Expect more volatility
Apr 03:
Oil prices are expected to remain highly volatile for the rest of the year
8Inventories in the US are continuing to build
8And even though OPEC cuts are holding it is uncertain whether they will be in the future
8There are however record long positions in crude but their total value is lower than what they were in April, 2014 for example
8Then again, contango is eroding and forward curve implies draw down in stocks later this year
8Medium sour crudes see production cuts and relative price rises
8The forecast continues to be bullish, a $ 65 in Q3, 2017, going up to touch $ 70 in Q4, 2017 before falling to $ 65 in 2018.
8The price forecast band is wide, at $ 60 to $ 80 between 2019-23
8Many players are now hedging their bets. There is structured hedging going on, selling 24 month strips once every quarter
Find out more in Reports on what kind of hedging strategy is best suited in a volatile market
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8Inventories in the US are continuing to build
8And even though OPEC cuts are holding it is uncertain whether they will be in the future
8There are however record long positions in crude but their total value is lower than what they were in April, 2014 for example
8Then again, contango is eroding and forward curve implies draw down in stocks later this year
8Medium sour crudes see production cuts and relative price rises
8The forecast continues to be bullish, a $ 65 in Q3, 2017, going up to touch $ 70 in Q4, 2017 before falling to $ 65 in 2018.
8The price forecast band is wide, at $ 60 to $ 80 between 2019-23
8Many players are now hedging their bets. There is structured hedging going on, selling 24 month strips once every quarter
Find out more in Reports on what kind of hedging strategy is best suited in a volatile market
