“Lower for longer is the new normal” (ICP Forecast as of July 2017)

July 12, 2017 • Tell FriendsPrinter Friendly

The summary of market info as of 12 July 2017 is as follows:

  • Even though the OPEC delivered on pledges to reduce supply, its output still exceeded demand in the first half of this year. Its ally, Russia would stick to the current deal and oppose any proposal for deeper production cuts to avoid sending the wrong message to the oil market. This pact continue to strongly defend the deal, which they believe to be the best way to re-balance the market by letting supply, demand and prices work.
  • The rapid increase in U.S. oil production is more obvious. Shale revolution has turned the U.S. into a big producer of oil, allowing it to become less reliant on imports. U.S. exports in the first three months of 2017 exceeded five of the 14 members of the OPEC.
  • Three years into the biggest oil downturn, some analyst see the recovery slipping further from view. The strategy to cut the production is suggested to be abandon entirely and revert to its previous policy of maximizing production to squeeze rivals out of the market, to limit growth in U.S. shale oil.
  • EIA forecasts WTI at $49.01 for 2017, while Brent at $50.84/bbl for 2017.

ICP was forecasted at 45.2/bbl in July 2017 and will average at $ 48.5/bbl for full year 2017.

Jul 2017

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