Following an oil price rally of nearly 55% since its February lows, Geoff Blanning, head of commodities at Schroders, looks at the main catalysts behind the move and asks how long will this latest rally last.
A slowdown in oil production growth combined with sustained record levels of demand and a reversal of deeply-depressed investment demand is already boosting the oil price and could underpin a sustained rally in 2016. Have we reached peak oil supply growth? While oil supply grew overall in 2014 and 2015, the rate of production growth slowed sharply in the second half of 2015. The main reasons that suggest we could be at the peak of production are as follows: · The most significant decline in production growth will be seen in the US, given the recent renewed collapse in drilling activit...
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