By Charles Kennedy of Oilprice.com

The UAE’s economy minister sees oil jumping to $60 per barrel in the next few months.

"It’s possible for oil prices to reach $60 or more during this summer,” UAE economy minister Sultan Bin Saeed Al Mansoori said at a conference in Abu Dhabi on May 30.

There is a growing chorus of oil market watchers that see the oil price rally continuing, after rallying more than 80 percent over the past several months. According to Bloomberg, the global chief economist at Standard Chartered Plc says WTI and Brent will rise above $60 before the end of the year, and SEB Bank agreed that the markets would see oil prices above $60 in 2016.

Those voices come two weeks after investment bank Goldman Sachs, a notorious bear when it comes to oil prices, suddenly become a lot more bullish on crude. "The oil market has gone from nearing storage saturation to being in deficit much earlier than we expected," Goldman concluded earlier this month. That statement came not too long after Goldman had warned that record high oil storage levels around the world threatened to push crude prices down into the $20s again.

Now, sentiment is trending up along with prices. Global demand continues to rise, and summer driving season in the U.S. could add a bit more strength on the demand side. The IEA has already predicted that the global surplus shrinks to just 0.2 million barrels per day in the second half of the year, but as the surprise outages in Canada and Nigeria make clear, unexpected events could tighten markets further.

Still, the markets are not without headwinds. Suncor Energy is bringing some oil production back online in Alberta this week as the threat of wildfires recedes. Also, Iraq raised its export quota ahead of the OPEC meeting, signaling its intent to step up exports.

Nevertheless, global demand continues to rise while producers face disruptions and natural depletion. That points to higher oil prices.

"I think the secular trend is higher. We have been saying this for a few months. The damage we are doing to the non-OPEC supplies is just tremendous at this point in time. Non-OPEC supplies are down about 1 million barrels per day…So yes, we can get a bit of a correction in the near-term. Net-length is very high in the market. But the secular trend is definitely up," Amrita Sen, cofounder and chief oil analyst at Energy Aspects, told CNBC in a May 27 interview.

By Charles Kennedy of Oilprice.com

Also See:
OPEC Head Calls for $65 Oil

http://oilprice.com/Energy/Oil-Prices/OPEC-Head-Calls-for-65-Oil.html

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I could see a run back to $60. Just got a look at May oil statements. Genesis Crude is paying $42.98 in Lincoln Parish. That may not sound so great, but it was a painful $26.68 in February.

I'd posted a video link earlier where the investment people are thinking of this as a federal bailout for the energy companies, shale boom. Well, I found it interesting, when taken in the right context.  If  interested: https://www.youtube.com/watch?v=QGmCjbju8Y0  

"The next few months"...are up.

Oil falls, U.S. crude ends below $40 on nagging glut worry

NEW YORK | By Barani Krishnan Tue Aug 2, 2016 3:30pm EDT reuters.com

Oil prices fell again on Tuesday, erasing early gains and dragging U.S. crude below $40 a barrel as persistent worries of a glut offset the boost from a weak dollar early in the session.

U.S. crude futures settled down more than 1 percent after initially rising over 2 percent, traders said. A slide in U.S. equities also weighed.

"There is much talk about the product glut replacing the oil glut, and this is a worrisome indicator for crude demand," said Frank Klumpp, oil analyst at Stuttgart-based Landesbank Baden-Wuerttemberg.

U.S. West Texas Intermediate (WTI) crude settled down 55 cents, or 1.4 percent, at $39.51 a barrel. It had rallied to $40.91 earlier. On Monday, it slid below $40 for the first time since April.

Brent crude fell 34 cents, or 0.8 percent, to settle at $41.80, after touching a session high at $43.18.

The dollar hit a six-week low, which buoyed oil in early trade, but then U.S. stocks fell to a three-week trough.

"I am bullish here overall but worry about being too early," said Scott Shelton, energy futures broker at ICAP in Durham, North Carolina. "I also wonder if the market is going to chop around a bit first, like it did in late May to June before dropping after many threw in the towel."

Oil hit 2016 highs above $50 a barrel between late May and June as crude supplies tightened from disruptions in Canada, Nigeria and Libyan energy sectors, and a near economic meltdown in OPEC member Venezuela. The rally faded soon after as higher prices spurred more output of crude and refined products.

Analysts polled by Reuters expect the U.S. government to report on Wednesday that crude stockpiles fell 1.4 million barrels last week after a surprise build the previous week that broke a nine-week drawdown. Trade group American Petroleum Institute (API) will issue a preliminary inventory report at 4:30 p.m. EDT on Tuesday ahead of the government data.

Global fuel stockpiles are brimming. Refineries have churned out huge volumes of diesel, gasoline and jet fuel. Crude remains oversupplied as top OPEC oil producers pump near record high levels.

Saudi Arabia has cut its crude selling price to Asian customers, signaling another price war and tussle for market share.

Hedge funds and other speculators have turned more bearish toward crude and refined products in the last two months amid signs of a gasoline glut.

"With the market continuously focusing on oversupply, this bearish trend seems hard to change in the near term," said Hans van Cleef, ABN AMRO senior energy economist.

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