Raymond James new oil price forecast
Conclusion: Supply uncertainty + surprisingly resilient demand = higher oil prices.
Over the past several quarters, we've attempted to balance bullish oil supply trends with our measured view on demand given mixed sentiment on the pace of the global economic recovery. Since the start of the year, however, the unrest in the Middle East/North Africa (especially Libya) has overwhelmed other considerations. Slowing non-OPEC production growth combined with the lower OPEC spare capacity sets the stage for further price increases in 2012. Barring another major supply shock (and $150+/Bbl oil), we believe global demand will remain fairly resilient if Brent prices stay below $125. Unfortunately, we are already at that threshold. If oil prices keep moving higher, then slowing global oil demand (and probably global economic activity) will eventually solve the high price problem. All-in, our oil price forecast moves meaningfully higher: from $90/Bbl to $101/Bbl for WTI in 2011, and from $98/Bbl to $111/Bbl for Brent. For 2012, we're moving from $100/Bbl to $118/Bbl for WTI, and from $105/Bbl to $125/Bbl for Brent. Lastly, our long-term forecast for both WTI and Brent rises from $110/Bbl to $125/Bbl.
Oil Prices
Oil Prices
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Prices
Goldman comments causing today's selloff. I think it is important to note that all of our Sweet 16 companies will do just fine even if oil does drop to $100/bbl. My guess is that it won't. For my forecast models I'm still using $90/bbl WTI. For companies like GPOR, GTE and PMG that sell most of their oil on contracts tied to indexes closer to world prices (ie. Brent or Gulf Coast markets) I'm using $100/bbl.
NEW YORK (AP) -- Oil tumbled more than 3 percent Tuesday after Goldman Sachs warned investors that crude is due for a "substantial pullback."
Goldman analyst David Greely noted that global supplies remain "adequate" even though the rebellion in Libya shut down production there. Before fighting broke out in February, Libya exported about 1.5 million barrels per day2 percent of global demand -- mostly to Europe.
Fears of tightening global supplies have helped push oil prices 33 percent higher since the middle of February.
Benchmark West Texas Intermediate crude for May delivery gave up $3.71, or 3.4 percent, to $106.22 per barrel on the New York Mercantile Exchange, shedding nearly two weeks of price increases. At one point it dropped to $105.60. In London, Brent crude lost $3.47, or 2.8 percent, at $119.95 per barrel on the ICE Futures exchange.
Analyst and trader Stephen Schork pointed out that anyone who bought oil contracts last week paid between $107.58 and $112.94 per barrel. If oil continues to hold below that level, it could trigger a wider selloff.
"If they panic, we could be at $100 (per barrel) in no time," Schork said.
NEW YORK (AP) -- Oil tumbled more than 3 percent Tuesday after Goldman Sachs warned investors that crude is due for a "substantial pullback."
Goldman analyst David Greely noted that global supplies remain "adequate" even though the rebellion in Libya shut down production there. Before fighting broke out in February, Libya exported about 1.5 million barrels per day2 percent of global demand -- mostly to Europe.
Fears of tightening global supplies have helped push oil prices 33 percent higher since the middle of February.
Benchmark West Texas Intermediate crude for May delivery gave up $3.71, or 3.4 percent, to $106.22 per barrel on the New York Mercantile Exchange, shedding nearly two weeks of price increases. At one point it dropped to $105.60. In London, Brent crude lost $3.47, or 2.8 percent, at $119.95 per barrel on the ICE Futures exchange.
Analyst and trader Stephen Schork pointed out that anyone who bought oil contracts last week paid between $107.58 and $112.94 per barrel. If oil continues to hold below that level, it could trigger a wider selloff.
"If they panic, we could be at $100 (per barrel) in no time," Schork said.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Prices
Looks like Goldman and Bloomberg were wrong again. Amazing how people trade on what these "experts" tell them. I'm sure they were not trying to manipulate the market so they could get in at lower prices!
NEW YORK (AP) -- Oil settled above $111 per barrel Wednesday as the dollar weakened and the government reported an unexpected drop in U.S. crude supplies. Gas pump prices also edged higher to $3.84 for a gallon of regular.
Benchmark West Texas Intermediate oil for June delivery gained $3.17 to settle at $111.45 per barrel on the New York Mercantile Exchange. Oil has increased 20 percent since the beginning of the year as investors anticipated rising global demand and unrest in North Africa and the Middle East threatened oil fields and shipping lanes vital to world supply.
The surge in oil had cooled recently as industry groups monitored the effect of higher prices on petroleum demand and the global economy. The International Energy Agency, OPEC and others have said that they see signs that consumers are using less fuel as prices rise. In the U.S., retail surveys by MasterCard SpendingPulse indicate that motorists have cut back on gasoline purchases for the past seven weeks.
Oil rose Wednesday as the dollar lost ground to the euro, the British pound and other major currencies. The dollar has been sliding since Standard & Poor's downgraded its outlook for U.S. debt earlier this week. Oil, which is priced in dollars, tends to rise as the dollar falls. That makes crude contracts cheaper for investors holding foreign currency.
The Energy Information Administration reported that U.S. oil supplies unexpectedly shrank by 2.3 million barrels last week. Analysts expected an increase of 1.6 million barrels.
At least some of the decline occurred because refineries used more crude to produce gasoline and other products, while crude imports declined.
"The decline in imports suggests refiners were unwilling to bring in higher-priced foreign barrels," said Platts senior oil analyst Linda Rafield.
EIA also reported that gasoline supplies fell by 1.6 million barrels last week. Some analysts have pointed to falling supplies as a sign that U.S. demand is holding steady. Yet Andrew Lipow, President of Lipow Oil Associates in Houston, said the drop in gasoline supplies may have more to do with many refineries along the East Coast being on hold for routine maintenance and other issues.
EIA data shows that gasoline demand has dropped for the past three weeks, when compared with levels from a year ago.
Gasoline pump prices keep rising nevertheless. The national average increased slightly on Wednesday to $3.837 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is 28.8 cents higher than it was a month ago and 97.8 cents higher than a year ago.
Fred Rozell, the retail pricing director at OPIS, said pump prices should increase a little more this summer as refineries switch to summer gasoline blends that are more expensive to produce. Summer blends already account for roughly 80 percent of the gasoline sold, Rozell said. The rest will be at the pumps in the next several weeks.
Still, "I don't think we'll get to $4 per gallon nationally," Rozell said. "If we do, it'll be a very brief phenomenon and I think prices will retreat."
In other Nymex trading for May contracts, heating oil added 6.29 cents to settle at $3.2214 per gallon and gasoline futures increased 4.42 cents to settle at $3.2773 per gallon. Natural gas gained 4.8 cents to settle at $4.310 per 1,000 cubic feet.
In London, Brent crude rose $2.52 to settle at $123.85 per barrel on the ICE Futures exchange.
NEW YORK (AP) -- Oil settled above $111 per barrel Wednesday as the dollar weakened and the government reported an unexpected drop in U.S. crude supplies. Gas pump prices also edged higher to $3.84 for a gallon of regular.
Benchmark West Texas Intermediate oil for June delivery gained $3.17 to settle at $111.45 per barrel on the New York Mercantile Exchange. Oil has increased 20 percent since the beginning of the year as investors anticipated rising global demand and unrest in North Africa and the Middle East threatened oil fields and shipping lanes vital to world supply.
The surge in oil had cooled recently as industry groups monitored the effect of higher prices on petroleum demand and the global economy. The International Energy Agency, OPEC and others have said that they see signs that consumers are using less fuel as prices rise. In the U.S., retail surveys by MasterCard SpendingPulse indicate that motorists have cut back on gasoline purchases for the past seven weeks.
Oil rose Wednesday as the dollar lost ground to the euro, the British pound and other major currencies. The dollar has been sliding since Standard & Poor's downgraded its outlook for U.S. debt earlier this week. Oil, which is priced in dollars, tends to rise as the dollar falls. That makes crude contracts cheaper for investors holding foreign currency.
The Energy Information Administration reported that U.S. oil supplies unexpectedly shrank by 2.3 million barrels last week. Analysts expected an increase of 1.6 million barrels.
At least some of the decline occurred because refineries used more crude to produce gasoline and other products, while crude imports declined.
"The decline in imports suggests refiners were unwilling to bring in higher-priced foreign barrels," said Platts senior oil analyst Linda Rafield.
EIA also reported that gasoline supplies fell by 1.6 million barrels last week. Some analysts have pointed to falling supplies as a sign that U.S. demand is holding steady. Yet Andrew Lipow, President of Lipow Oil Associates in Houston, said the drop in gasoline supplies may have more to do with many refineries along the East Coast being on hold for routine maintenance and other issues.
EIA data shows that gasoline demand has dropped for the past three weeks, when compared with levels from a year ago.
Gasoline pump prices keep rising nevertheless. The national average increased slightly on Wednesday to $3.837 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is 28.8 cents higher than it was a month ago and 97.8 cents higher than a year ago.
Fred Rozell, the retail pricing director at OPIS, said pump prices should increase a little more this summer as refineries switch to summer gasoline blends that are more expensive to produce. Summer blends already account for roughly 80 percent of the gasoline sold, Rozell said. The rest will be at the pumps in the next several weeks.
Still, "I don't think we'll get to $4 per gallon nationally," Rozell said. "If we do, it'll be a very brief phenomenon and I think prices will retreat."
In other Nymex trading for May contracts, heating oil added 6.29 cents to settle at $3.2214 per gallon and gasoline futures increased 4.42 cents to settle at $3.2773 per gallon. Natural gas gained 4.8 cents to settle at $4.310 per 1,000 cubic feet.
In London, Brent crude rose $2.52 to settle at $123.85 per barrel on the ICE Futures exchange.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Prices
Very good article today from Motley Fool.
http://www.fool.com/investing/general/2 ... right.aspx
Yes, we may see a near-term correction in oil prices, but IMO oil prices are moving steady higher throughout this year. Global demand for oil is going up and the industry is not able to increase production capacity at the demand growth rate that has been steady for the last 18 months.
http://www.fool.com/investing/general/2 ... right.aspx
Yes, we may see a near-term correction in oil prices, but IMO oil prices are moving steady higher throughout this year. Global demand for oil is going up and the industry is not able to increase production capacity at the demand growth rate that has been steady for the last 18 months.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group