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31 Mar 2015
Oil expected to trade down to USD 40/barrel - BNP
FXStreet (Bali) - Robert McAdie shared BNP's Global Strategy Outlook, noting that WTI prices are expected to trade down to the USD 40/barrel level.
Key Quotes
Oil prices are expected to trail lower as Shale oil stocks remain high, heating oil demand weakens going into spring and oil refiners go into a period of maintenance shutdown.
We expect WTI prices to trade down to the USD 40/barrel level with Brent trading at a USD 8 - USD 10 premium. In the summer, and into the end of the year, we expect oil prices to slowly climb back to USD 65-USD 75/barrel as the decline in the US rig count eventually affects total US oil output and OPEC output falls back to November quota numbers.
The main risk to this rebound, however, is a potential deal between the US and Iran, which would result in a marked increase in supply coming into the market, keeping oil at low levels for a lot longer.
The weaker oil price will continue to mute any inflation pressure globally and continue to put pressure on oil producer countries (especially Venezuela, Russia, Iran, Malaysia, Brazil) and companies, as revenues get squeezed.
Key Quotes
Oil prices are expected to trail lower as Shale oil stocks remain high, heating oil demand weakens going into spring and oil refiners go into a period of maintenance shutdown.
We expect WTI prices to trade down to the USD 40/barrel level with Brent trading at a USD 8 - USD 10 premium. In the summer, and into the end of the year, we expect oil prices to slowly climb back to USD 65-USD 75/barrel as the decline in the US rig count eventually affects total US oil output and OPEC output falls back to November quota numbers.
The main risk to this rebound, however, is a potential deal between the US and Iran, which would result in a marked increase in supply coming into the market, keeping oil at low levels for a lot longer.
The weaker oil price will continue to mute any inflation pressure globally and continue to put pressure on oil producer countries (especially Venezuela, Russia, Iran, Malaysia, Brazil) and companies, as revenues get squeezed.