Emerging Consensus | Russell T. Rudy Energy LLC
According to a recent article in “World Oil”, a consensus as to where oil prices are headed seems to be emerging. This is based on data compiled by Bloomberg after interviews with 17 industry insiders. These included traders, operators, lenders and analysts. By and large, they all expect oil prices to rebound by year-end.
The median expectation of participants involved in the Bloomberg survey is that West Texas Intermediate (WTI) prices will reach $46 per barrel in the fourth quarter. This would be a result of the current surplus shifting to a deficit as predicted by Goldman Sachs. This would be consistent with the U.S. Energy Information Administration’s forecast of a domestic production drop of 620,000 barrels per day (bopd) and the International Energy Agency’s anticipated non-OPEC output decrease of 600,000 bopd.
The article goes on to quote some of Bloomberg’s sources, such as BP CEO Bob Dudley, who said “We’ll see higher oil prices with supply and demand tightening in the second half of the year.”
The lowest estimate was from Paris-based, Nataxis. The bank sees Iran’s production coming into the market, and increased output as a result of a stable government in Libya holding prices down to $38 in the fourth quarter.
OPEC Secretary General Abdalla El-Badri predicts global demand will increase by 1.3 million bopd and non-OPEC production dropping by 660,000 bopd, both of which would indicate higher prices. This is consistent with a 150,000 bopd production decrease in Russia anticipated by Neil Beveridge at investment research firm Sanford C. Bernstein & Co.
Iraq, and hedge fund manager Pierre Andurand, both anticipate $50 oil by year-end, and The United Arab Emirates sees the oil glut shrinking despite Iranian production.
Ole Hansen, head of commodity strategy at Saxo Bank, concludes that, “The combination of continued demand growth and falling U. S. production will eventually help create a floor in the market from where it will be able to rally back towards the $40-50 range by year-end.”
To read the article in its entirety, please go to http://www.worldoil.com/news/2016/2/03/oil-price-seen-surging-about-50-by-fourth-quarter-as-supply-eases .
