Oil sell-off: Perception overpowers reality - Malcy’s blog

May 10, 2017, 11:40 AM

Oil prices dropped approximately 13% over the last three weeks or so. Can you guess the culprit? It’s the rising shale output, isn’t it? Or are the fears rising shale output and its impact oil unjustified?

Malcolm Graham-Wood, Oil analyst at Malcy’s blog says “rising shale output shouldn’t be a major worry as there is limited scope for further expansion in the capacity and Saudi and other major OPEC producers can absorb the excess supply”.

He adds “there is a massive difference between perception and reality”. We cannot agree more as there is a widespread belief in the markets that every one barrel reduction in the output by the OPEC subsidises one barrel of Shale. The assumption is wrong, but is nevertheless weighing over oil prices.

Graham-Wood expects the oil market to tighten if the OPEC and non-OPEC producers extend the output cut deal till December. He is positive on oil prices in the long-term, but sees massive gyrations ahead of the OPEC meeting scheduled later this month.

Listen to the full segment for more info on-:

Malcolm Graham-Wood’s June end and Year end forecast for Oil

Stocks that could offer stellar returns amid potential oil rally in the second half of this year. The list includes names like - Amerisur Resources, Hurricane Energy, SDX Energy and Trinity Exploration.

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