Weekly Oil Report: Crude Rising in the Unsettled Market

In the third week of June, Brent closed at $72.43 and WTI hit $71.41 on Friday. During the week, crude faced two red days in a row but OPEC could turn the page on the next day after emphasizing the future demand as before. However, technically, the chart of crude is not promising for the next week of June.

After the Federal Reserve expressed concerns about a real inflation possibility, the market reacted spontaneously by buying the dollar and selling commodities. The dollar index soared up about 2.20% and stock decreased. Commodities such as Gold and Copper had a bad week, however, oil did not follow.

The inconsistency among the markets might suggest that oil is just flaring up because of OPEC supports. “Our joint efforts in rebalancing the market through voluntary production adjustments continue to be highly effective,” said OPEC Secretary General Mohammad Sanusi Barkindo.

WTI could nearly close the gap with Brent after about 5-4 years. In fact, it is the result of higher demand and transportation in the US while the oil rigs are not rising accordingly.

Meanwhile, top commodity traders still foresee the $100 crude oil for the next six years. Even with the threat of clean energies, it does not seem that the shifting happens soon. The world is not ready for the change. Although some of the largest producers and refineries, including the Royal Dutch Shale, have tapering plans for oil in the coming years, we cannot expect any sudden shifting to renewables and green energies.