Crude prices are higher today but haven't been able to recover from last week's drop -- which started on rumors of an OPEC+ production increase. The rumors turned out to be true as 137K bpd will hit the market next month.
Looking at the chart of crude, it's in a precarious place. The bottom end of the recent range didn't hold and we saw intraday selling yesterday and today. Support at $60 will probably need to be tested and if that breaks we could be back to the Liberation Day extremes, similar to what we saw in 2-year yields this week.
It could also be a big opportunity. $55 oil is simply not sustainable. Exploration spending is already bombed out at around $10 billion per year globally (or about 12 hours of AI capex spending) and it will worsen with lower prices. In addition, US shale basis are running out of Tier 1 inventory and dropping new drilling.
That sets up a period in late 2026 or in 2027 when the market is undersupplied and OPEC has virtually no spare capacity. That's when it really gets interesting.
This article was written by Adam Button at investinglive.com.Hence then, the article about the oil market is running on fumes was published today ( ) and is available on forex live ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
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