RBC Says Oil Has Bottomed and Doha Fail Proves It

The fact that crude futures didn’t sell off after major oil producers failed to reach an agreement to cap production last week is another sign the commodity has bottomed, RBC Capital Markets’ Helima Croft said Monday.

“The supply picture is improving. U.S. production is coming down significantly,” RBC’s head of commodities research told CNBC’s “Squawk Box.” “The overhang is being eliminated, and so we are talking about a movement to $50” a barrel.

Last week, U.S. crude rose more than 8 percent and international benchmark Brent finished up 4.6 percent.

The advances came after Saudi Arabia scuttled a proposed deal among oil producers to freeze production at January levels. The kingdom insisted Iran participate, but Tehran had long said it would not turn off the taps until its output returned to presanctions levels.

Croft said top oil producer Russia cannot add much more output, and Iran is likely just 100,000 to 150,000 barrels from its goal, after adding about 400,000 already.

“Everybody in this market is pretty much capped out, so when they say they’re going to bring it on, there’s not much more to bring on at this point,” she said.

via CNBC

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency
trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza