8 May 2015
Recovery in oil price likely to run out of steam – Capital Economics
FXStreet (Barcelona) - According to Capital Economics, oil prices are likely to fall than rise, and further maintain a year-end target at $60 for brent.
Key Quotes
“The price of a barrel of Brent crude oil has recovered to nearly $70, a 50% gain from its January low of $46. The US benchmark, WTI, has also rebounded.”
“Our Energy service remains the place to look for analysis of the key drivers. But, in short, prices have been boosted by evidence that the previous sharp falls have undermined US production, the reversal of some of the earlier dollar strength, a surge in speculative buying, and hopes for a pick-up in demand, particularly from Europe.”
“As it happens, we think that oil prices are now more likely to fall than to rise further over the rest of the year. Our end-2015 forecast for Brent remains $60.”
“OPEC supply is ample, even before any boost from the easing of sanctions on Iran, while US output could quickly rebound. Indeed, the active rig count in the US may soon start to rise again.”
Key Quotes
“The price of a barrel of Brent crude oil has recovered to nearly $70, a 50% gain from its January low of $46. The US benchmark, WTI, has also rebounded.”
“Our Energy service remains the place to look for analysis of the key drivers. But, in short, prices have been boosted by evidence that the previous sharp falls have undermined US production, the reversal of some of the earlier dollar strength, a surge in speculative buying, and hopes for a pick-up in demand, particularly from Europe.”
“As it happens, we think that oil prices are now more likely to fall than to rise further over the rest of the year. Our end-2015 forecast for Brent remains $60.”
“OPEC supply is ample, even before any boost from the easing of sanctions on Iran, while US output could quickly rebound. Indeed, the active rig count in the US may soon start to rise again.”