We may see strong upward pressure under oil prices…
Due to a decline in oil investments for two years in a row, if demand gets stronger, which could well be the case, we may see strong upward pressure under oil prices!
The oil industry has declined more than 20 percent in 2015, but more importantly this decline is expected to continue throughout 2016. This is the 1st time in 30 years that declines in oil investments have been recorded for two successive years in a row. And this could have implications if demand increases in the near-term.
With a glut in supply and with demand unable to keep up, it has been an influential moment for oil markets as prices continue to slide.
Saudi Arabia, one of the leading OPEC producers, is anticipated to cut production by 1 billion barrels per day to balance the oil market, however, although Saudi Arabia is perhaps in the best position to increase or decrease supply at minimum cost, the country also wants Mexico and Russia to participate in a deal to cut production.