“Oil prices remain volatile. The recent rally in the oil markets has seemingly run out of steam as bearish supply-side factors appear to be dictating the directional move in oil price.”
“The contango continues to act as a stimulus for demand in the short-term. The ‘storage play’ remains an attractive strategy for those with capacity to store, which in turn is helping the market maintain a quasi-equilibrium. However, as we approach storage limits, which are expected to be hit in the second to third quarter, oil prices may come under pressure as the supply glut can no longer be absorbed by storage tanks.”
“Fundamentally the market remains oversupplied with many still feeling the effects of Organisation of the Petroleum Exporting Countries’ decision to maintain its 30/million barrels per day production quota, coupled with the burgeoning US shale production boom. For the market to successfully absorb the excess barrels, an increase in consumer-led demand is needed.”
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Simon Chan, PR Assistant Manager, KPMG
KPMG Press office: +44 (0) 207 694 8773
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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.