Oil Prices Rally But Market Fundamentals Remain Unchanged

by Ship & Bunker News Team
Wednesday January 28, 2015

Oil prices Tuesday rose 3 percent but U.S. commentators said that this was not the start of a prolonged upswing in prices, Reuters reports.

"Given the expectations in supply, it's kind of surprising to see the market pop this much today," said Lipow Oil Associates President, Andrew Lipow.

"There's probably some short-covering after the extended sell-off we've had for weeks now, but I don't think fundamentally anything's changed."

According to the report, a weak dollar has bolstered the oil price to some extent.

However, U.S. crude inventories were estimated to have risen by approximately 4.1 million barrels last week, suggesting that concerns about the oversupply of oil will persist.

Investment banks were said also to have remained skeptical of a change in fortunes for the oil industry with UBS lowering its price forecasts and Goldman Sachs predicting lower demand in China and other emerging economies.

Last week, OPEC Secretary General Abdalla El-Badri predicted that oil prices would not continue downwards but the rebound would not be swift, saying "I think the price will stay at where we are now."

Ship & Bunker News Team
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