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Supply To Push Oil Lower Despite Stronger Economic Outlook

Like any other asset, crude oil trades on supply as well as demand. And while an improving U.S. economy can be expected to boost the demand for oil, a stronger supply picture should take any wind out of oil’s sales in 2014.

“Although the U.S. economic growth story might make it seem as though rising petroleum demand should lift prices, the uptrend in U.S. crude oil production is likely to be the dominant fundamental factor for the oil market in 2014,” Tim Evans, energy futures specialist at Citi Futures, wrote to CNBC.com. “Four-week average U.S. crude oil production is running some 1.2 million barrels per day, or 18 percent higher than a year ago—more than enough to outpace demand.”

“This is a commodity that’s priced off of logistics,” said Stephen Schork, the editor of the Schork Report. “We know that North America is awash in oil,” he said, making the most important question how easily it can be moved to market.

CNBC [1]

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Mingze Wu

Mingze Wu [6]

Currency Analyst at Market Pulse [7]
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu
Mingze Wu

+Mingze Wu [10]