Crude oil (BZ=F, CL=F) prices are rebounding in Wednesday’s trading session, ending a three-day slide. The Morning Brief welcomes on Rystad Energy global market analysis director and head of oil macro Claudio Galimberti to discuss the oil market dynamics at play.
Galimberti attributes the oil rally primarily to demand concerns in China. “This is the major factor for this week that everybody is looking at,” he says, also mentioning how Canadian wildfires may be contributing to price phenomena. He emphasizes that “the [energy] markets are still tight.”
Looking ahead, Galimberti forecasts oil prices to remain range-bound between $80 and $90 per barrel, largely due to OPEC production cuts. He explains this range with two key points: first, prices are unlikely to fall below $80 because “OPEC is very determined” to keep this threshold; second, prices are unlikely to exceed $90 because “when prices are high, there is an incentive for OPEC+ members to not be compliant” with agreed-upon production cuts.
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