FXStreet (Guatemala) – Analysts at ANZ explained that the concerns of a growing supply glut saw Brent oil prices hit an 11 year low overnight as the market ground lower in search of a bottom.
Key Quotes:
“Recent catalysts include OPEC effectively abandoning output limits at its early December meeting, and last week’s lifting of 40-year ban on crude exports in the US, which suggest increased supply is playing a role. However, reports overnight of a warm Northern hemisphere summer would not have helped matters.
“The issue for markets is how low prices fall to, how long they stay there, and how sharp and strong the possible rebound could be? Some analysts are of the view that prices have further to go, with a rebound unlikely until late next year.
This suggests tough times for oil producers, but a boon to consumers. Given market dynamics, a sharp rebound in oil prices could well eventuate as both supply and demand adjust. But it is difficult to know exactly when this will occur.”
(Market News Provided by FXstreet)