A recent rise for the price of oil could be set to continue, according to one commodities analyst, who believes there is now a “real rebalancing” in the market.
“The fundamentals are changing and the market is rebalancing,” Jodie Gunzberg, head of commodity and real asset indices at S&P Dow Jones Indices, told CNBC Wednesday.
This support is coming from several sources, including OPEC whose members are complying with production cuts and China where there is demand growth, according to Gunzberg.
“I think Hurricane Harvey really gave (oil) a boost, it was a catalyst for some of the disruptions in the refineries,” she added. “We are seeing real rebalancing in the oil market.”
“When we look at the index data, we can see the price could move even as high as $80 to $85 (a barrel). Not immediately, but with their structural backwardation and shortages in the market, you just can’t replenish it overnight,” she said.
A backwardation occurs when futures contracts expiring at later dates are trading lower than current prices.
Brent closed as $59.02 per barrel on Monday, its highest since July 2015 and Gunzberg noted that Brent had entered a technical bull market.