Crude Oil to Steep Towards the 50$ a Barrel
Crude oil is going up again but this bullish movement is not expected to last long. The fundamental reasons behind this rise are wild fires that have been spreading around the Canadian oil fields while causing a substantial damage to the current supply. It may take some time to recuperate and reach previous production levels, and demand is due to rise even more.
In addition to that, political and social problems are adding mayhem to the matter. Military activity in the Nigeria Delta area is a constant source of worry as attacks on energy infrastructure continues. Nigerian government's attempts to put a stop to the attacks are barren.
The Libyan civil war is also to blame as they contribute to the ongoing supply deficiency. Nearly 2.5 million barrels a day are lacking this year. But the market is still discounting low supplies which stops the barrels from getting to 50$ just yet.
This situation is, however, unlikely to last long as Canadian manufacturing is due to bounce back in the next few weeks. Such recovery will ultimately cause crude oil to go back to its normal levels and we will eventually witness a decline in prices.
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