We’re not the only ones betting on lower lows in the oil sector.
After a 29% rally in the price of crude oil, even Goldman Sachs believes the oil rally is doomed to fail, reiterating its call that crude prices will remain low. "We continue to view the oil market as oversupplied and with low prices required to achieve the sufficient rebalancing in 2016," Goldman analysts wrote, as quoted by CNBC.
The firm noted the latest surge had more to do with repositioning and technical patterns than any real change in the fundamentals affecting oil these days. Even Saudi Arabia continues to rule out a reduction of output to push prices higher.
While reports continue to talk about a drop in the U.S. rig counts, don’t listen. Rig counts mean nothing. They rise and fall all the time.
Don’t buy into the oil rally. It’ll end very badly – as usual.