Goldman Sachs sees a correction in oil prices on the horizon even amid a significant recovery in the last month and the recent decision by OPEC and its allies to extend historically large production cuts through July.
“With oil now above $40/bbl, supplies will be incentivized to return, but we believe the risks to the downside have increased substantially and are now looking for a 15-20% correction which may already be underway after Monday’s modest sell-off,” Goldman Sachs’ commodities research team led by Jeffrey Currie wrote in an analyst note on Tuesday.
“Despite the rally, we have been hesitant to recommend a long position this early in the cycle for several reasons,” the analysts wrote.
Surplus oil inventory of an estimated 1 billion barrels has piled up as the world’s economic activity and travel remains largely at a standstill amid coronavirus fears.
There’s also widespread uncertainty over a demand rebound, with health authorities stressed the risk of a second wave of Covid-19 infections plunging countries back into lockdown.
Haha...i had the same question as yours. After observing the transaction volume this few months, probably that explain. Hopefully more discussion after o&g trend come back
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SuperPanda
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Posted by SuperPanda > 2020-06-01 06:43 | Report Abuse
if this week remain 70+, can enter back betting on another oil rally, disposed 88c when qtr out but price went up, very lucky