Changing supply and demand fundamentals have led the team of commodity strategy analysts at RBC Capital Markets to shift from an oil view of “calculated optimism” to one that is “structurally bullish.”

RBC issued a report in late June outlining the factors at work that for oil markets that could be “the most constructive in years.” Behind the increasingly positive market response is OPEC’s return to 100% compliance and a resulting focus on spare capacity, according to the report.

“First, it highlights the market’s lack of concern around cheating and second, it potentially questions whether OPEC will be challenged to even reach full compliance if production losses continue to mount over the back half of the year,” RBC analysts said.

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