👀 Ones to watch: The MOST undervalued stocks to buy right nowSee Undervalued Stocks

Oil bears could emerge from hiding in H2 if supply disruptions fail to materialize

Published 11/04/2024, 20:38
© Reuters.
LCO
-
CL
-

Investing.com -- Oil prices in rally mode in recent weeks on bets that geopolitical tensions will  potentially disrupt global supplies, but if this threat fails to matarialize, the bears will likely emerge from hiding in the second half of the year, Macquarie said in a note. 

"[W]e expect oil to turn bearish as the year, progresses due to NOPEC supply growth, a material amount of OPEC+ spare capacity reentering the market, and the potential that continuing inflation softens demand," Macquarie said in a note. 

The threat of supply disruptions from geopolitical tensions is enough in the near-term, however, to support oil prices, but "without an actual supply disruption associated with geopolitical events, Brent oil will struggle top hold above $90 a barrel in the second half of the year," Macquarie added. 

Geopolitical tensions in the Middle East continue to simmer, with Iran starting to garner more attention amid fears that imminent retaliatory on Israel is imminent. Talks on a truce to temporarily halt the Israel-Gaza war, meanwhile, suffered a flow following an Israeli missile that killed three sons of Hamas political leader Ismail Haniyeh.

Beyond the Middle East, Ukraine attacks on refineries in Russia have also been underpinning oil prices.  

Still, rising non-OPEC supplies have kept worries about a supply surplus front and center, with the U.S. leading the charge. 

U.S. oil production is expected to grow by 260,000 barrels per day this year, to a record 13.19 million bpd, the U.S. Energy Information Administration estimated in a recent report.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2024 - Fusion Media Limited. All Rights Reserved.