Problem in the Oil Markets

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We’ve got a problem in the oil markets. But let’s be honest, we’ve had this issue for a while – global stockpiles.

A large and growing glut of crude oil is set to keep the price of oil low for the foreseeable future, and there isn’t really much we can do about it. Sadly, the drop in oil prices is already putting pressure on the US indices, and we are also expecting it to drag down the natural gas market as oil is set to remain the cheapest fossil fuel for energy generation and industry production.

And it’s not just oil that is amassing huge stockpiles, the byproducts of diesel and petrol are also weighing heavy on the markets. In the US these distillate stocks of diesel and jet fuel are more than a third above the five-year season average, according to the EIA.

So where do we go from here? Well, sadly the only way for the market to react is by dropping. Prices for oil will remain low for the foreseeable future, unless some global solution can be found for the mounting stocks.

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