Higher oil prices in store, but limited upside for most

Crude oil prices rebounded from the first quarter trough of US$43 per barrel, and hovered around US$60 per barrel through most of the second quarter, before sliding back to US$52 this week. The rise in prices was due largely to a change in sentiment, as market dynamics have not changed - the world is still awash in oil.

Global production is expected to slow down in the second half of the year and into 2016, which, combined with an expected pick up in world demand, should help bring the market into a more balanced position. This will be supportive for prices over the next 12-18 months, although significant downside risk remains, says TD Economics.