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Crude oil prices tumbled after US President Trump announced new tariffs on Chinese goods. Still, Rabobank analysts remain bullish on oil prices. They see the current oil market setup is looking a lot like the second half of 2017.  

Key Quotes:  

“Oil markets have been unable to break out over the last few weeks as bullish fundamental data has been undermined by weak economic data and a surging US dollar.”

“US crude stocks dropped by an impressive -8.496mb on the week with stocks at the key Cushing hub declining by -1.533mb”

“Looking forward we remain bullish oil prices despite the recent bout of macro and trade inspired weakness. Our base case forecast remains for Brent to rally to $75/bbl in 2H19 and we continue to see 4Q19 as a key market inflection point.”

We see a very similar market setup to 2H17 when oil prices rallied over 25% on the back of large crude stocks declines and aggressive speculative buying.”

“We see the current low exposure to oil markets from large speculators as setting the stage for a strong rally later this year.”