The market prices in the future, and in the future they see higher interest rates in the advanced economies, even higher ones in the U.S., and a strong dollar. A strong dollar is usually a sign that oil prices will remain weak. Where is the dollar taking crude?
Growing oil supplies in OPEC countries, increasing efficiency in U.S. crude oil production, and weaker-than-forecast margins are the key risks to oil outside of dollar strength.
The U.S. government’s recent Short Term Energy Outlook suggests that oil futures will become much flatter — meaning nearby prices won’t be all that much different that prices for, say, oil deliveries in June 2019.
