Crude Oil prices had its best day of the year yesterday – rising above $50 per barrel after a terrible week which saw prices fall as concerns about excess supple rose.
The price jump was due to United States inventory numbers showing that stockpile of oil products has reduced indicating that demand is above current supply.
This lead some analysts including Goldman Sachs to be bullish on Oil and Energy companies thus also lifting US Energy stocks in equities markets yesterday.
Readers of Naira Insider will know we are more sceptical.
The US Inventory news was as much a surprise to us as it was the global oil market.
However, our view of world production levels with a low likelihood of the OPEC deal holding, Russia not cutting as much as promised, Libyan and Nigerian production hitting the market – still leaves us bearish.
Many analysts agree, but the market as of yesterday remains split.