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It gets knocked down. It can’t get up again.

Still no signs of life in the oil price, with Brent stuck down at around $51 per barrel. Meanwhile, the US benchmark West Texas Intermediate was trading at $48.18, bouncing back slightly after briefly falling below the $48-a-barrel mark earlier in early Asia trading.

Bank of America Merrill Lynch reckons the black stuff is facing its “moment of truth”.

This trend of lower long-dated crude oil prices should continue, as oil-on-oil supply competition in the US forces renewed producer hedging pressures. Still, the spot oil market may change direction very rapidly here. The key to the rebalancing of global oil markets is a surge in US oil exports, in our opinion, as it will help clean up the large North American surplus. The ramp up is already underway. But to clear the global glut, Brent-WTI spreads at the prompt may need to widen further. With global oil demand still very firm, we still see spot oil prices moving higher.

True, a more hawkish Fed hiking path may prevent a Brent move to $70/bbl by June. But for consumers or investors seeking energy inflation protection for the summer, this oil dip is a buy.

Copyright The Financial Times Limited 2017. All rights reserved.
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