According to Sen, oil prices fell too far, too quick, largely attributable to technical elements like automated buying and selling methods. On the provision facet, manufacturing cuts by main oil producers and slower-than-expected U.S. output will assist oil prices get well, she says. Whether or not the market is oversupplied will largely boil all the way down to demand.
“At current levels, based on current fundamentals, the market is oversold,” Sen mentioned. “But it doesn’t mean that it’s going to correct straightaway, right? It can still take some time, unless and until you have the clarity, particularly with the trade talks over today and tomorrow.”
The foremost driver for oil prices proper now’s the energy or weak point of broader monetary markets and the temper across the economic system, says Vandana Hari, founding father of vitality markets consultancy Vanda Insights. Whether or not OPEC and different main producers together with Russia will persist with their manufacturing cuts is now a secondary concern, in her view.
In the approaching days, oil prices will seemingly observe shares on information from the U.S.-China trade talks, Hari says. But she additionally expects sentiment in regards to the ongoing negotiations and underlying financial issues to steer oil prices for the following few months.
“From an oil markets perspective, what would be very important to keep in mind is this is going to be a highly volatile environment,” she instructed CNBC Asia’s “Squawk Box.”
“Today and tomorrow are the first days of the talks this year, but then these are expected to continue. Nobody is expecting a huge breakthrough or a complete solution to this any time soon.”