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Oil prices have recovered nicely since the madness of negative prices back in March when Saudi Arabia and Russia decided to engage in a price war just as the coronavirus swept across the globe crushing demand.
While the recovery probably helped hold off a wave of bankruptcies among shale producers, it is unlikely we see too much more of an increase in oil prices.
The demand will not be high enough to push prices significantly higher…
The world economy was weak before the coronavirus shut down a vast swath of the global economy.
The post virus recovery will take a long time, so it is likely oil prices remain range-bound for an extended period.
You see, the drop in prices caused steep sell-off in almost all energy-related securities over the past several months.
The midstream segment that transports and stores oil got hit right along with producers.