$50/bbl WTI within six months
Posted: Mon Jun 22, 2020 5:06 pm
Oil Prices Will Hit $50 Before The End Of The Year
By Yousef Alshammari - Jun 22, 2020, 4:00 PM CDT
> There is plenty of bullish sentiment in oil markets despite fears of a second wave of COVID-19 cases and under compliance from some OPEC+ members.
> The second half of 2020 should see oil prices rise to $50 on the back of a global demand recovery and controlled cuts from OPEC+.
> Money managers reduced their net long positions last week, highlighting the downside risks in the near-term.
https://oilprice.com/Energy/Energy-Gene ... -Year.html
Our Forecast for H2 2020
"We see global demand rising to an average of 91.67 million bbl/d and 93.67 million bbl/d in Q2 and Q3, respectively, while global supply is currently forecast to average 88 million in the H2 2020. The continued rise in prices is crucial if we are to see increased supplies from both OPEC+ and North America. CMarkits expects inventories in both the U.S. and OECD to stay above the 5-year average throughout H2 2020, which could limit price recovery in the months ahead. Subject to strengthening economic activities in China, India, the U.S. and Euro-Zone, we see prices continuing to rise above $50 in H2 2020, averaging $43 in Q3 and $49 in Q4."
MY TAKE:
> It is now clear to everyone that even if COVID-19 cases increase we are not going back to shutdowns; not for a disease that has a 98% recovery rate.
> Note in the first line of the paragraph above that Q3 demand of 93.67 million b/d compares to 88 million b/d of supply in the 2nd half of THIS YEAR.
> No matter how high oil prices go, it takes several months to see D&C spending pick up and up to six months before you see a supply response.
> This cycle is going to push the global oil market into a very tight market in 2021.
> If WTI rebounds to where it was "pre-pandemic" the stock valuations in today's newsletter are way too low.
By Yousef Alshammari - Jun 22, 2020, 4:00 PM CDT
> There is plenty of bullish sentiment in oil markets despite fears of a second wave of COVID-19 cases and under compliance from some OPEC+ members.
> The second half of 2020 should see oil prices rise to $50 on the back of a global demand recovery and controlled cuts from OPEC+.
> Money managers reduced their net long positions last week, highlighting the downside risks in the near-term.
https://oilprice.com/Energy/Energy-Gene ... -Year.html
Our Forecast for H2 2020
"We see global demand rising to an average of 91.67 million bbl/d and 93.67 million bbl/d in Q2 and Q3, respectively, while global supply is currently forecast to average 88 million in the H2 2020. The continued rise in prices is crucial if we are to see increased supplies from both OPEC+ and North America. CMarkits expects inventories in both the U.S. and OECD to stay above the 5-year average throughout H2 2020, which could limit price recovery in the months ahead. Subject to strengthening economic activities in China, India, the U.S. and Euro-Zone, we see prices continuing to rise above $50 in H2 2020, averaging $43 in Q3 and $49 in Q4."
MY TAKE:
> It is now clear to everyone that even if COVID-19 cases increase we are not going back to shutdowns; not for a disease that has a 98% recovery rate.
> Note in the first line of the paragraph above that Q3 demand of 93.67 million b/d compares to 88 million b/d of supply in the 2nd half of THIS YEAR.
> No matter how high oil prices go, it takes several months to see D&C spending pick up and up to six months before you see a supply response.
> This cycle is going to push the global oil market into a very tight market in 2021.
> If WTI rebounds to where it was "pre-pandemic" the stock valuations in today's newsletter are way too low.