Too much, too soon. The 36% increase in crude oil prices since August is likely to stimulate a strong production response, with a typical lag, sufficient to keep oil inventories elevated above the five-year average for all of 2018, despite the extension of OPEC’s production cut to the end of the year. It may even undermine OPEC compliance and negatively impact oil demand.
Crude oil prices have bounced off their worst levels amid profit-taking after falling for the third consecutive day. Oil prices have given back a significant chunk of their gains made over the past couple of weeks.