FXStreet reports that West Texas Intermediate (WTI), the North American oil benchmark, is nearing $42.00 per barrel. Strategists at TD Securities note that the demand side is still a concern for investors but supply cuts should mean the market will rebalance by 2021.

“Amid large crude oil inventory draws in the US, money managers increased their long WTI crude oil exposure. But, specs also added shorts as OPEC+ production increases came near, at a time when demand growth remains a worry.”

“While demand continues to be a concern, the supply side is providing more support as US production fell back down to 11 millon barrels per day, showing signs that a revival in shale supply in the US looks to be a long shot. This suggests the global market should rebalance into 2021 as demand normalizes and creates a set-up in which an eventual recovery in demand could see energy prices trade significantly higher in the future.”