Mumbai: You can’t swing a cat without hitting a barrel of crude oil in the United States.”
So says a report by US-based Schork Group, offering a reason for the fall in oil prices for the third straight week.
However, even as US crude stockpiles gained for the seventh week, Peter McGuire, managing director, Commodity Warrants Australia said: “Supplies may be higher, but demand from the northern hemisphere in June-September will support prices.”
Not everyone is convinced this will happen. Most analysts say supplies are sufficient to tackle any seasonal demand.
Commodities advisor Shamik Bhose said that even if members of the Organization of Petroleum Exporting Countries were to cheat on their quotas, (the amount each has agreed to produce), it will not help.
“There is a possibility of a spike in crude up to $60 or above only if the geopolitical situation in central Asia worsens,” he says.