Market Overview

Oil Hits A Fresh 6-Month High: Now What?

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Oil Hits A Fresh 6-Month High: Now What?
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Oil prices moved higher by more than 2 percent Monday as investors and traders reacted to reports that supply disruptions in Canada and Nigeria helped push oil production below consumption levels for the first time in two years.

Meanwhile, analysts at Goldman Sachs who developed a reputation as being a long-term oil bear shifted gears on Monday and turned more positive on the oil market.

Related Link: Goldman Lowers Oil Price Projections, Sees Return To Surplus In 2017

So, how do commodity investors and market participants proceed from here?

According to RJO Futures' Phillip Streible, the supply disruptions that contributed to higher oil prices will eventually come back online.

Speaking as a guest during Monday's edition of "Bloomberg GO", he said the momentum in oil price is set to continue and he wouldn't be surprised to see oil hit $50 a barrel in the next few days. However, once oil trades above the $50 per barrel mark it's possible that "some of the hedging comes back on and we reject that first time over $50 price and back off a little bit."

Looking forward to Wednesday's EIA weekly petroleum status report, Streible suggested that a 3 million barrel draw, or a large inventory draw in gasoline, could also contribute to pushing oil prices higher.

Posted-In: Oil Demand oil prices Oil SupplyCNBC Commodities Markets Media Trading Ideas

 

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