by Serene Cheong, Heesu Lee and Ben Sharples
The Washington Post with Bloomberg
(Bloomberg) — If the oil market needed a theme song for now, it might turn to the one where Taylor Swift nervously sings: “Are we out of the woods yet?”
A slump in U.S. production, unexpected cuts in output from Nigeria to Colombia and rising gasoline demand have helped drive a major rally since mid-February. As investors boost their bullish bets, analysts from UBS Group AG to Morgan Stanley and Goldman Sachs Group Inc. see pitfalls ahead.
The global crude glut has spread to diesel and will threaten gasoline after the peak summer driving season. Unplanned outages may be resolved in coming months, boosting supplies as Iran seeks to regain market share and Saudi Arabia defends its turf. Demand is “underwhelming” in emerging markets, says Morgan Stanley. Goldman Sachs warns U.S. output may rebound if prices rally too quickly.