Oil prices will rise in the long run, but in the short run there will be a pullback. Supply has been increasing, therefore adding pressure on oil prices in the short term.
But long term projections of oil prices are on bullish but the short term price momentum worries a bit about more of a pullback given that there is still a significant amount of supply and the supply actually hasn't reduced in large scale at all as we could figure this out from recent hint by US crude inventory figures.
For importing countries, those prices are good news. The key driver here is that it's going to be good for people who are again importing oil to their economies, tougher for those who are exporting oil. Canada happens to be one of those areas.
Huge export volumes are certainly going to have adverse impact areas like Alberta, Saskatchewan and Newfoundland and Labrador where there is a lot of demand tied to high oil prices.
Commodity futures update:
On daily and weekly charts of WTI CL1, the major trend for this commodity has been downtrend, the latest trend has shown buying interest but range bounded (61.82-56.51).
Oil futures extended gains, with U.S. crude and gasoline inventories set to drop and as the (EIA) raised its 2015 oil demand growth forecast.
Brent futures (BRN 2015) were down 0.48% at 65.55 a barrel.
While the WTI CL1 crude climbed 1.4% or 83 cents to $59.96 a barrel.
We recommend buying near month At-The-Money WTI CL1 futures contracts at 60.20 levels for a straight 100 points in medium term.
