RBC Capital Markets - Oil Price Forecast Feb 18

[dan_s]

Oil Strategy: Conceptualizing a Re-Rating of the Back End of the Curve
 With a line of sight to global stockpiles returning to normal by this summer, an increasing call on
OPEC on the horizon, and perhaps even a call on US shale on deck for next year, the trajectory
of oil balances and prices are arguably the most constructive in years.
 We anticipate firming oil prices with WTI and Brent averaging $61.50/bbl and $64/bbl this year.
Our bull case has WTI overshooting $70/bbl by year-end (see Figure 9). The most impactful part
of our forecast is the re-rating of the forward curve. Our base case has WTI and Brent averaging
$63/bbl and $66/bbl in 2022, or 15–20% appreciation from current strip pricing.