More Volatility
The much debated shape of the oil-price curve will take the form of a W and increased supply will renew downward pressure on prices as volatility is exacerbated by storage and investment decisions, Yergin said Tuesday.
Output from the Organization of Petroleum Exporting Countries rose the 890,000 barrels a day to 31.02 million in March, the biggest gain since June 2011, the Paris-based International Energy Agency said Wednesday. OPEC’s 12 members, which pump about 40 percent of the world’s oil, are scheduled to meet June 5 in Vienna.
“Bullish markets are notorious for ignoring bearish news,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “The market is focusing on the 20,000 barrel decline in U.S. production last week, while ignoring the 890,000 barrel-a-day increase in OPEC production that the IEA reported. There’s no physical tightness to withstand the next wave of selling.”