Oil prices anticipate tight market by mid-2021: Kemp

REUTERS | U.S. petroleum inventories are falling towards more normal levels as the glut earlier this year caused by volume warfare among OPEC+ members and the first wave of epidemic-driven lockdowns is gradually absorbed.

Falling inventories are likely to herald a tighter production-consumption balance and a cyclical upswing in both spot prices and calendar spreads next year, which are already being anticipated by oil traders in rising futures prices.

But a cyclical upturn in the oil market depends on OPEC+ timing production increases carefully, on the global economy avoiding a double-dip recession, and on the rapid deployment of an effective coronavirus vaccine.

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