Both, the American benchmark West Texas Intermediate (WTI) and European benchmark Brent crude oil reached the highest levels for this year as Libyan crude exports seem to be hit again, while the OPEC countries are expected to leave their production unchanged.
We can see a corrective bullish rally after previous year’s slump in oil prices, mostly driven by speculation that supply challenge is slowing, easing the previous pressure on the market as news from Libya or slowdown on oil rigs in the United States helped the commodity to recover.
Libyan oil port of Zueitina reporter halted crude flows due to protests. Country’s oil production is below 500,000 barrels per day (bpd) now, what is only a third of previous production before the year 2010. Moreover, riots in Yemen with airstrikes of Saudi Arabia helped to lift prices.
Besides geopolitical conflicts we could see also easing US dollar, helping the dollar-backed commodities to recover.
Nevertheless oversupply persists on the market, being the major driver for previous bearish speculation and news from muslim oil-exporting countries (while OPEC is able to provide stable amount of oil constantly) with lower US oil rigs projects does not seem to be enough to halt current trend.
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