Quote:
Originally Posted by burn_this_city
Why would someone cover if they believed it would go back to the bottom again?
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Because those people covering see less downside than short term upside and they are locking in gains. We are probably in a bottoming process. This is not 2008/9 where you will see a V shaped oil recovery, this is a fundamental supply/demand imbalance oil price collapse. Before the all clear is sounded you will likely see a re-test of the lows or a higher low in the low 30's or high 20's. We probably eventually see oil recover to the mid forties by year end if US and other Non-OPEC production shows significant declines.
OPEC has not gone through this pain and the burning their cash reserves to see world rig counts recover - they are attempting to stabilize the price not make it go higher to save these producers.