Oil rally to reverse amid US supply
Analysts say current rebound is driven by liquidity and sentiment rather than fundamentals
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London
THE rebound in oil will reverse because rising US production is deepening the global supply glut, according to UBS, Bank of America Corp and Commerzbank.
Brent futures entered a bull market this month as US drillers stopped using a record number of rigs, companies cut at least US$40 billion from spending plans and hedge funds turned the most bullish in seven months. None of that will stop Brent slipping back to US$45 a barrel or lower within the next three months, from about US$61 now, the banks' analysts say. Prices fell as low as US$45.19 on Jan 13.
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