""The market is massively oversupplied," said Eugen Weinberg, analyst at Commerzbank in Frankfurt. "This rally doesn't have strong legs," reports Reuters.
There isn’t much by way of fundamentals to rely upon for the rally to continue. Closer to $50/b, additional supply will start trickling in and buyers will be wary to buy at higher prices. With no excuses at hand, the speculators will find it difficult to prop prices higher.
The short-term speculative pop in crude is about to end and the long-term fundamentals will take over. Prices should drop closer to $36 to $38/b in the near future. [44,32 USD/barril hoje]
By Rakesh Upadhyay for Oilprice.com
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