Well-supplied global oil markets – highlighted by U.S. inventories at multi-decade highs – are expected to keep a firm lid on prices this week , though upside surprises may come from better-than-expected U.S. data and continued unrest in the Middle East.
Sentiment was evenly split in CNBC’s latest oil market survey, with five respondents calling for higher prices this week and five looking for declines . Still, the balance of opinion may shift in favor of a more bearish bias if U.S. supplies continue to build, the stronger dollar persists and as data from China, the world’s second-largest economy, disappoints.
“The oil market remains oversupplied, with U.S. crude oil stocks at a record level and gasoline stocks in the Amsterdam-Rotterdam-Antwerp (ARA) region riding at a five-year high,” said Eugen Weinberg, head of commodity research at Commerzbank.
Citing a monthly report from the Organization of the Petroleum Exporting Countries (OPEC), Commerzbank added that there are downside risks for global oil demand “first foremost’ as a result of China, even though the group envisages stronger oil demand and an increased call on OPEC in the second half of the year.
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