The recent weakness in oil prices is largely due to concerns over persistently high US stocks and growing production there. However, the headline US crude stocks number is a little misleading and US production growth should slow over the rest of the year. At the same time, strong growth in oil demand driven by higher global growth and an extension of OPEC’s production cuts, should ensure that stocks fall sharply in the second half of 2017, putting upward pressure on prices.
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