The following is an excerpt from Mark Shenk | June 12, 2016 | Bloomberg.com |
The oil market just hit a yellow light.
Crude’s more than 90 percent from a 12-year low earlier this year has U.S. shale producers starting to return to their drilling rigs, threatening to slow further gains.
"The $50-to-$60 a barrel area is the sweet spot," said Mark Watkins, the Park City, Utah-based regional investment manager for The Private Client Group of U.S. Bank, which oversees $128 billion of assets. "You start to have producers come back at $50, but a lot of them come in at $60."
Money managers were cautious in the week ended June 7, betting more heavily on a price drop than on further gains, according to data from the Commodity Futures Trading Commission. WTI rose 2.6 percent to $50.36 a barrel on the New York Mercantile Exchange during the report week before closing at $49.07 a barrel June 10.
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