Why The Crude Rally Has Fizzled – Part 3 (Of 3)

This is the third and final segment of a three-part look at why oil prices have failed to rally despite OPEC’s best efforts at managing supply cuts. Not only have prices failed to rally, both NYMEX WTI and ICE Brent have fallen around 9% over the past three weeks. In case you missed them, be sure to read part 1 and part 2.
Refiners do what is in their best interest, too.
Bank of America Merrill Lynch analysts recently said that refiners the world over need to weigh capitalizing on current strong margins – and risk dumping products into an already glutted market – or forgo profits now in the hopes of rescuing global product prices.
‘Refiners need to be careful not to repeat last year’s mistake and raise production in response to high margins only to add to already high inventories,’ the analysts said. ‘In a way, they face a big dilemma: be penny wise now and possibly look pound foolish later, essentially run harder now and suffer in six months, or run softer now and forgo profits.’

This post was published at Zero Hedge on Apr 28, 2017.