The oil price has had an amazing run by racking up it’s 6th straight week of gains and although there may be some way to go with this rally some analysts see the top is not far away which may be followed by a major retraction.
The catalyst for the move down may US President Donald Trump who Trump signed two executive orders which will streamline the process for companies to build oil and gas pipeline projects while at the same time making it harder for state officials to overturn the new orders.
Some however are skeptical of the move and believe the final decision may rest with the US legal system
"Republican lawmakers and energy groups have long accused blue states of blocking pipeline projects using a section of the Clean Water Act," NPR's Nathan Rott reports for our Newscast unit. "One of Trump's executive orders will aim to weaken that power. Whether that actually happens will remain to be seen. Executive orders only do so much — and lawsuits are sure to follow."
If the executive orders are successful it will add more American oil to the market which is already at record levels and may cause an oversupply on the world stage which in turn will pressure the oil price.
“We don’t think you’re going to get back to those $80 levels again, so you’ve got some modest upside here,” Goldman Sachs’ head of commodities research, Jeff Currie, told CNBC this week.
.“While the macro risk-on environment and the threat of disruptions may drive spot prices even higher, we still expect that prices will decline gradually from this summer as shale and OPEC production increases. With large spare capacity in OPEC and the Permian basin and a wave of long-cycle projects still expected to come online in 2020, we maintain our $60/bbl forecast for next year.” He added.
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