The oil price has continued its winning streak today, racking up its 6th straight day of gains with some analysts failing to understand the reasons behind the rally.
The jump in price over the last week may be attributed to extended cuts in oil production from Opec and Non Opec members, but according to some not all members are sticking to the deal and it’s only a matter of time when this is reflected in the price,
“Sentiment remains that the market is oversupplied with OPEC members reluctant to further curb production,” said Enrico Chiorando, a U.K.-based analyst at energy consultancy Love Energy.
“Having pledged to ‘do whatever it takes’ to support prices, OPEC still faces ever-rising stocks and a hesitancy from producers for deeper cuts.” He added.
After six straight days of gains, some predict that it may be time to get out and book in profits as the inevitable downturn in oil could come at any time now, and the reversal could be sharp and strong,
"There's a real problem out there in the crude oil market. You're going to get a rally and the market is rallying today. It's been rallying for the past 4 or 5 days. It is nothing but a dead cat bounce," noted commodities trader Dennis Gartman, the editor and publisher of The Gartman Letter.
Mr Gartman also said that he agreed with some of the world’s most knowledgeable figures on oil, who predict that within the next two decades other sources of energy will be mainstream and oil will be made redundant,
"I'll go with the Deputy Crown Prince of Saudi Arabia, Mohammed bin Salman, who has made it abundantly clear that he thinks crude oil over the course of the next 20, 30 years is going to be essentially worthless." He added.