The world’s largest independent oil merchant said supplies will engulf demand into next year and prices may not rally until 2017, canvasing a murky perspective for energy-rich nations as OPEC assemble to examine output policy. Their market glimpse reveals that 12 number of individuals collectively and the oil corporation as a whole will have to face a much higher downtrend than the downturn that followed the financial conflict 2008 when prices retrieved within a year.
According to web sources, an executive of one the biggest independent oil merchant stated,” The stock-build will continue to weigh on the market, with prices unlikely to move beyond the current range until well into 2017″. From past six months, trading of Benchmark Brent crude was between $43 and $65 a barrel. That vision is echoed by competing for trading houses containing Trafigura Pte Ltd. and Gunvor Group Ltd. as Saudi Arabia, Iraq, Russia etc. drawing full-throttle to safeguard market share.
With the grouping of Petroleum Exporting, Countries expected to preserve output policy when they gather and plan to incline up production next year regardless of further hike in quotas and overflowing stockpiles. We are expecting a tremendous slump in non-OPEC oil supply this year as compared to last 25 years, almost 700,000 barrels per day. Meanwhile, universal demand production is at a hectic pace, led by emerging countries like India, China and many more.
Oil merchant claimed that it is the third year in a row they have more supply than demand and thus they believe that prices will be under control. And there is no reason if there is a sudden increase in the price in 2016 this year. So all have eyes on 2017 as the year of oil’s U-turn. But there is a lot of pressure from the supply side preventing a recovery until the second and third quarter of 2017 which is going to be the time for a rebound.