Analysts Just Aren’t Buying the Oil Rally – WSJ

Even as oil rallies, analysts have barely nudged up their price forecasts as they worry that crude’s recent gains might not be sustainable.The price of oil has jumped 76% from the decade-low it hit earlier this year. That is mainly on hopes that dwindling U.S. oil production will help take crude out of an oversupplied market.But many analysts aren’t buying the rally. They question whether the glut is indeed on the wane given current stockpiles and the potential for increased supply from Iran and elsewhere. They point out that last year, the oil price also rallied in the spring on a belief supply was falling, only to collapse in the year’s second half.A survey of 13 investment banks by The Wall Street Journal sees Brent crude, the international oil-price benchmark, averaging $41 a barrel this year, up $1 from the same survey conducted in March. The banks see West Texas Intermediate, the U.S. oil gauge, averaging $39 a barrel this year, broadly unchanged from the prior survey.Oil settled higher Thursday for the third consecutive session. Front-month Brent crude for June delivery rose 96 cents, or 2%, to $48.14 a barrel. U.S. futures rose 70 cents, or 1.5%, to $46.03.

 

Source: Analysts Just Aren’t Buying the Oil Rally – WSJ

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