Stifel sees light at end of tunnel

[dan_s]

Stifel: These Factors are Contributing to an Oil Price Recovery:

Oil traders experienced a moral victory today, witnessing West Texas Intermediate (WTI) close at $52.13 – the highest since January 5, 2015. The spot price has rebounded 17% in less than a week, dating back to the closing of $44.45 on Wednesday, January 27.

A note published this morning by Stifel provided more bullish forecasts for investors, and even upgraded or raised price targets on nine E&P companies. The investment firm believes declining rig counts, which are down 24% from October, will eventually slow United States supply growth and ultimately allow demand to recover. A total of 199 rigs have been laid down in the Bakken, Eagle Ford and Permian plays in the same time frame.

“One of the major problems was that supply growth was contributing to an oversupplied market, but with the rig count declining significantly, that part of the problem is getting fixed,” said Mike Scialla, Managing Director for Stifel, in an interview with Oil & Gas 360®. The firm expects the “global market, to slow, if not stall, during 2H15,” according to the note. The oversupplied market is apparent: U.S. crude stockpiles are currently the highest on record.

Scialla believes the volatility of E&P stocks will continue through earnings season even though share values experienced a spike today. “I don’t think we’re completely out of the woods, but I think there’s sight of a light at the end of the tunnel,” he said.

Full article:
http://www.oilandgas360.com/stifel-fact ... 2-26401157