OEF Rapid Review Articles
Oil closed in a bear market but analysts are looking beyond the current slide to next year for a rebound. Crude has plunged by more than a fifth in less than two months as refineries created a glut of gasoline while failing to eliminate excess supply of crude. That wrecked refining margins and hurt the earnings of Exxon Mobil Corp., BP Plc and Royal Dutch Shell Plc. Yet, global oil prices will average $57 a barrel in 2017, according to the median of at least 20 analyst estimates compiled by Bloomberg. “We’re looking at a market that’s still in a very slow process of rebalancing and we don’t think that you’ll get a sustainable deficit until the second quarter of 2017,” said Michael Hsueh, a strategist at Deutsche Bank AG who sees oil at $53 next year. “Those deficits are necessary to draw down global inventories, but that will still take until the end of 2018, it appears.” Oil companies’ capital expenditure reductions are set to reach $1 trillion by 2020, and Simon Flowers, the Edinburgh-based chief analyst at Wood Mackenzie Ltd., said there’s a “ticking time bomb” that will eventually push prices higher. The lack of investment “will have a big impact on global supply,” said Hans Van Cleef who forecast Brent will reach $70 next year.
LINK TO THE SOURCE ARTICLE:
Oil Analysts See $57, Even $70, Next Year
LINK TO THE SOURCE ARTICLE:
Oil Analysts See $57, Even $70, Next Year