“Oilmageddon” recession ? (ICP Forecast as of 10 February 2016)

February 10, 2016 • Tell FriendsPrinter Friendly

The summary of market info as of 10 Feb 2016 is as follows:

  • IEA reported that global oil surplus will be bigger than previously estimated in the first half, increasing the risk of further price losses, as OPEC members Iran and Iraq boost production while demand growth slows.
  • As the dollar strengthens, it makes oil more expensive for buyers paying with other currencies, especially for China as the world’s biggest importer, which can weigh on demand and prices.
  • Based on Minas Bloomberg Price data (15 Dec 2015-5 Feb 2016), Minas is now looking supported around the $24 level. Unfortunately, the glut of supply remains and will likely remain a cap on prices. This pattern would keep price trapped between the early February high of $31.53 and the support mentioned above at $24.69 for a few more weeks.  If price is unable to break above $31.53 the probability of  low Minas price remains higher over the next month or two.

Feb 2016 1

  • For the first time, EIA forecast the same numbers for both WTI and Brent for the rest of the year. EIA forecasts WTI at $37.52 for 2016, while Brent at $37.43/bbl for 2016.

Based on the graph, we estimate SLC will be stable to $28.17/bbl in February 2016 and will average at $ 31.81/bbl for full year 2016.

Feb 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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