It’s a matter on market share not price control (ICP forecast as of June 2015)

June 10, 2015 • Tell FriendsPrinter Friendly

The summary of market info as of 9 June 2015 is as follows:

  • OPEC Meeting on 5th of June 2015, agreed not to cut the production. It seems they choose to collapse oil prices and trying to squeeze out US Shale-oil producers., even though they are not a swing producer anymore.
  • However, shale-oil producer has proved surprisingly resilient at lower prices. Break-even costs for U.S. shale production dropped 15 to 30 percent in recent months, while the production from each well has increased as much as 30%.
  • The contest for market share is proving more important than price. The competition is intensifying because each producers is eager to sell more oil even as world demand slows, to secure their market share.
  • EIA forecasts that Brent prices will average $61/bbl in 2015 and $67/bbl in 2016, The 2016 price forecast is $3/b lower than in last month’s STEO. While WTI prices in both 2015 and 2016 are expected to average $5/b less than the Brent.

Based on the graph, we estimate SLC will be down to $61.59/bbl in June 2015 and will average $ 58.96/bbl for full year 2015.

June 2015

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.

 

Subscribe to Real Options Valuation by email to get course schedule and updates from us.