The price of Oil has reached $70 a barrel as a rally was driven by signs of a tightening market. Oil companies began selling their inventories to take profit at this high price. In the meantime, China has lowered its oil import to a five-month low, creating an even bigger supply and demand imbalance, which contributed to the price fall. Energy stocks are poised for a mixed start amid the oil price and future concerns.
However, on the crude oil future side, things are looking bright. WTI and Brent crude oil futures erased earlier declines and are on a healthy upward trend this morning, steadying after solid gains in the previous two sessions. There is a high expectation for a surging fuel demand later this year among investors, while major producers are maintaining a supplied discipline. Thus, the shift in supply and demand balance is likely to happen later this year.
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