Is The Current Oil Price Rally A “Head Fake?”

10 Jan 2018   Prices

With oil prices at their highest level since 2015, the next stop along the way seems to be $70 per barrel. However, some analysts see the more likely scenario as a retracement back down to lower levels. A “perfect storm of events” helped push oil prices to their current levels, according to Barclays analysts in a recent research note. However, those factors—cold weather in North America, unrest in Iran, strong economic growth and technical buying from hedge funds and other money managers—may not be enough to keep the oil rally going, the investment bank says. The risk to oil prices is “skewed to the downside from here as fundamentals on the horizon suggest a reversal is in order,” Barclays analysts, led by Michael Cohen, said in a January 5 research note. While the recent oil price rally was bolstered by some unexpected events, the forces that will spark a […]

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