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Crude Oil Trading at Six-Month High

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Oil continued its rally on Monday, reaching a six-month high after supply disruptions in Nigeria moved the market into deficit.

The rebound from a 12-year low recorded in February is gradually bringing back optimism among energy and economic investors, but most importantly, it gives a clear direction of the market if producers were to cap production.

The US West Texas Intermediate oil traded at $47.81 a barrel on Monday before declining to $47.45, while Brent crude oil rose 2.8 percent to $49.19 a barrel.

Stocks of oil dependent economies rallied with Canadian stocks reaching a two-week high as S&P/TSX Composite Index rose 1.1 percent to 13,898 at 11:05 Toronto time.

Nigerian Stock Exchange All Share Index gained 1.45 percent to 26,824.35 at 9:20 a.m. in Nigeria.

Goldman Sachs Group Inc. reportedly increased its WTI price forecasts for this year from a $38.40 a barrel to $44.60, the institution said there will be more inventories reduction in the first quarter of 2017, with low-cost production continuing to grow.

Barclay’s analysts, Miswin Mahesy and Kevin Norrish also said in a report “that the oil market looks set for a rebalance faster than previously thought, making the risk of a sharp drop unlikely”.

While Goldman Sachs and Barclays analysts believe rebalancing of the market has started, it is too early to tell.

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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