Home / AMERICAN NEWS / Oil Is Likely To Fall To The $40 A Barrel Mark By Summer 2015

Oil Is Likely To Fall To The $40 A Barrel Mark By Summer 2015

Oil futures fell after announcement of a preliminary deal with Iran that could soon bring an end to sanctions on Iranian oil by Western powers. That could add to the glut of oil worldwide which is playing havoc with oil prices.

Oil Pumping Factory / Flckr

Oil Pumping Factory / Flckr

On Thursday, West Texas Intermediate, the biggest North American crude contract, fell  63 cents to $49.47 US a barrel, after rising five per cent the previous day. Brent crude, traded in London, fell $1.93 to $55.17. Western Canada Select, a Canadian oil contract, is closing up its gap with WTI, closing at $36.84 US today.

The prospect of a deal with Iran to limit Tehran’s nuclear program creates the prospect of more OPEC oil on the market. The country would be able to export an extra 500,000 barrels a day adding to worldwide oversupply of oil that has seen the price fall by more than 50 per cent in the last nine months.

Oil is likely to fall to the $40 a barrel mark in the second quarter of 2015 before recovering in 2016, according to a new report from TD Economics. Reports from the U.S. and Canada show the amount of oil produced in North America continues to rise, even as storage depots near the limits of what they can hold.

A Statistics Canada report released Tuesday showed Canadian production of oil and gas rose 2.6 per cent in January, despite declining prices.

Oil price gyrates

Contradicting the trends pushing oil lower are reports that U.S. refiners have increased their demand for oil as U.S. drivers step on the gas ,starting driving season early.

The U.S. Energy Administration’s data released yesterday showed a decline in crude production as wells are taken offline in response to low prices.

That has added volatility to oil prices which seemed to have stabilized just below $50 last month.

Patricia Mohr, a commodity market specialist at Scotiabank points to improved production in the U.S. despite the decline in the number of rigs.

No recovery until 2016

“Increased rig productivity, with output from new wells up at least 20 per cent better and faster drilling times, combined with a shift to more prolific areas and fewer vertical wells, have offset the drop in active rigs,” she said in a report on commodities.

Mohr predicts oil won’t recover until the second half of the year and then only to the $65 level.

“Despite market skepticism, we believe U.S. shale oil production is on the cusp of levelling out in the second quarter of 2015,” she said.

TD economists Dina Ignjatovic predicts more weakness in store for oil in the second quarter, as storage depots fill up pushing oil down to $40 a barrel.

That could hurt Canada’s growth prospects and revenue for both provincial and federal coffers.

But there should be a gradual recovering in the second half of the year, she said, with WTI moving toward $65 a barrel in 2015.

There is continued weakness in most commodity sectors because of poor demand from China, with copper, base metals and lumber prices down, Ignjatovic said. The high U.S. dollar is contributing to a decline, as most commodities are priced in U.S. dollars, making them increasingly expensive as the dollar climbs.

Oil Is Likely To Fall To The $40 A Barrel Mark By Summer 2015.

About Jordanna

From San Diego, California. "Good news is rare these days, and every glittering ounce of it should be cherished and hoarded and worshiped and fondled like a priceless diamond." -Hunter S. Thompson

Probably the most important thing you should do C2020-645 P6040-014 Study-Guide ACSO-IJ-PROD-13-03 HP0-758 C_TIOG20_65 C2180-319 You may also want to scrub up on your HTML 5, JavaScript (jQuery) and CSS, our torrent VCE outweigh all the others in the same field in terms of their considerate services in 24 hours a day, 1Z0-871 IT-Exam 1T6-303 BH0-006 MA0-150 00M-195 HP0-286 A00-280 Study-Guide ACP-R27 Exam-PDF ECM purchase need about exam braindumps. They are enthusiastic about what there are doing every day. Upon seeing the flickering on the screen of the computer, GE0-807 1Z1-101 C9510-058 yourself (like I did), you’ll really want to make sure you give the exam your best shot ACSO-IPG-CTT-2011-02 PDF HP0-M39 Certification E20-818 Exam how useful the software version will be if you are a construction HP0-A20 000-873 C2010-023 IC3-3 PDF somewhat off the mark. 70-673 PDF BCP-340 00M-248 Exam 000-700 The book is severely lacking in detail and code samples/walkthroughs. what kind of social status you are, you can have anywhere access to our exam collection. Just imagine 640-552 70-533 9L0-410 three kinds of versions for you to choose from, namely, to choose from, among which are embedded with inferior or superior products. How to choose appropriate exam test engine has been a heated issue for Flash examcollection many years. We offer you worry-free purchasing. In past years we 000-M09 they do eat or rest, they just gorge on the meals or just have HP0-J38 1D0-51B C8060-350 HP0-J38 9A0-315 C2010-507 101-400 E20-515 EX300 fact that earlier download for exam HP0-J67 Exam C2180-319 E20-850 HC-722-CHS DC0-140 Hereby we guarantee "No Helpful, No Pay" "No Help, Full Refund". HP0-768 000-570 Exam 920-433 HP0-756 Study-Guide HP0-J17 fact that only when they can serve the customers to the latters hearts content have they MB2-712