“A little Hope” (ICP forecast as of 11 May 2016)

May 11, 2016 • Tell FriendsPrinter Friendly

The summary of market info as of 11 May 2016 is as follows:

  • On June 2nd OPEC meeting, Saudi Arabia will probably keep producing crude at current levels under its newly appointed oil minister, Khalid Al-Falih. He  sticks with his predecessor’s policy of defending market share against higher-cost shale.
  • EIA reported an improved economic data. Growing supply disruptions, and falling U.S. crude oil production and rig counts contributed to the price increase.
  • OPEC sees  global oil demand is catching up with supply and the market should see a “rebalancing” in the second half of the year as cheaper crude has forced some production to close. U.S. shale producers require a price of at least $50/bbl in order to hedge future production.
  • EIA forecasted higher prices than previous month. EIA forecasts WTI at $40.19 for 2016, while Brent at $40.39/bbl for 2016.

Based on the graph, we estimate SLC will be increased to $40.57/bbl in May 2016 and will average $ 38.94/bbl for full year 2016.

May 2016

Disclaimer: The material is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Opinions expressed are our current opinions as of the date appearing on this material only and would be updated every month.

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