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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

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    3 scenarios that threaten oil prices.. Will it reach $60 next year?

    Rocky
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    3 scenarios that threaten oil prices.. Will it reach $60 next year? Empty 3 scenarios that threaten oil prices.. Will it reach $60 next year?

    Post by Rocky Tue 27 Aug 2024, 4:55 am

    3 scenarios that threaten oil prices.. Will it reach $60 next year?

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    Economy News - Follow-up
    [rtl]Global investment bank Goldman Sachs on Tuesday cut its forecast for Brent crude to $77 a barrel from $82 in 2025, and set three other scenarios that could take prices to $60. This comes after Morgan Stanley on Friday cut its forecast for Brent crude by varying percentages over the next five quarters, extending from the last quarter of 2024 to the end of next year.[/rtl]
    [rtl]Brent crude is trading around $81 a barrel at the moment, up about 7% since Wednesday in its biggest three-session winning streak since April last year, while West Texas Intermediate crude is nearing $77.[/rtl]
    [rtl]OPEC is still expected to raise output in the fourth quarter, Goldman Sachs analysts wrote in a research note, according to Bloomberg. The move could prompt the market to “shift from a near-term OPEC-supported equilibrium that reduces market volatility to a longer-term strategy that focuses on strategically controlling non-OPEC oil production and strengthening its cohesion.”[/rtl]
    [rtl]In early June, the OPEC+ alliance agreed to extend the additional voluntary production cuts of 1.65 million barrels per day, announced in April 2023, until the end of December 2025.[/rtl]
    [rtl]The countries also agreed to extend the additional voluntary cuts of 2.2 million barrels per day, announced in November 2023, until the end of September 2024. The quantities of this reduction will then be gradually restored on a monthly basis, until the end of September 2025, if market conditions are favorable.[/rtl]
    [rtl]Commercial oil inventories in OECD countries also remained roughly flat or did not change significantly during the northern hemisphere summer, contrary to Goldman Sachs’ estimates, which had expected a decline or drawdown.[/rtl]
    [rtl]U.S. crude oil production has exceeded expectations, thanks to improvements in production efficiency, meaning it can produce more oil with less or in more efficient ways, while demand growth in China has slowed due to a shift in road fuels (such as from oil to alternatives like electric cars) and, secondly, weaker demand for oil-based petrochemical products, according to Goldman Sachs.[/rtl]
    [rtl]The banks now expect global benchmark Brent crude to average below $80 a barrel in 2025, while Morgan Stanley sees futures at $78 to $75. Both see the crude market in surplus, with prices trending lower over the next 12 months.[/rtl]
    [rtl]The banks’ forecasts are in line with recent estimates from the International Energy Agency that global oil markets appear set to shift from deficit to surplus in the next quarter if the OPEC+ alliance goes ahead with plans to boost supplies.[/rtl]
    [rtl]The OPEC+ alliance led by Saudi Arabia and Russia has set a roadmap to restore output of around 543,000 barrels per day (bpd) in the fourth quarter, but says the plans could be “paused or reversed” depending on market conditions. A decision is expected in the coming weeks.[/rtl]
    [rtl]Even if the OPEC+ alliance cancels the planned production increase, stocks are expected to build next year at a significant rate of up to 860,000 barrels per day, amid increased supplies from the United States, Guyana and Brazil, according to the agency’s forecasts.[/rtl]
    [rtl]Analysts at Goldman Sachs warned that Brent crude prices could fall below their new forecasts under three scenarios: If Chinese oil demand remains flat, the price could fall to $60 a barrel; If the United States imposes a 10% tariff on all imports, the price could fall to $63 a barrel; and If OPEC decides to cancel its additional production cuts of 2.2 million barrels a day by September 2025, the price could fall to $61 a barrel, Bloomberg reported, citing the report.[/rtl]
    [rtl]“Crude oil markets are in a supply deficit, but it is likely to be at its limit now and will not get any bigger,” Morgan Stanley analysts including Martijn Rats and Charlotte Firkens said in a report. “By the fourth quarter of 2024, the market is likely to return to balance between supply and demand, and there could be a surplus in the oil market through 2025, as supply exceeds demand,” according to Bloomberg.[/rtl]


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