Oil Price forecast - April 7
Posted: Thu Apr 07, 2016 9:40 am
Oil at $35 a barrel is neither too high nor too low but just right to make shares of U.S. explorers worth buying, according to Goldman Sachs Group Inc.
While prices of crude at that level are above cash costs of production, they will deter a rebound in shale output from occurring too early, the bank’s New York-based analysts including Brian Singer said in a report dated April 6. Oil at $30 to $35 a barrel should keep the behavior of U.S. companies unchanged and help lift West Texas Intermediate to $55 to $60 a barrel in 2017, according to Goldman.
“We view our second-quarter 2016 oil outlook as an idealistic Goldilocks scenario,” the analysts wrote in the report. “We would use volatility to add to positions of shale productivity winners and the next rung down.”
Goldman said it favors U.S. producers EOG Resources Inc., Diamondback Energy Inc. and PDC Energy Inc. as well as stocks in “the next rung down” -- Hess Corp., Cenovus Energy Inc., Anadarko Petroleum Corp., Encana Corp., Continental Resources Inc. and Whiting Petroleum Corp. While the bank predicts WTI crude prices will average $35 a barrel in the second quarter, it forecasts $38 for 2016 and $57.50 for next year.
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Terry Starling, a Raymond James energy sector analyst, will be opening our luncheon in Houston on Monday, April 25 with their prediction of where oil prices are heading.
Technical analysis of oil price: http://www.investing.com/analysis/more- ... -200124327
While prices of crude at that level are above cash costs of production, they will deter a rebound in shale output from occurring too early, the bank’s New York-based analysts including Brian Singer said in a report dated April 6. Oil at $30 to $35 a barrel should keep the behavior of U.S. companies unchanged and help lift West Texas Intermediate to $55 to $60 a barrel in 2017, according to Goldman.
“We view our second-quarter 2016 oil outlook as an idealistic Goldilocks scenario,” the analysts wrote in the report. “We would use volatility to add to positions of shale productivity winners and the next rung down.”
Goldman said it favors U.S. producers EOG Resources Inc., Diamondback Energy Inc. and PDC Energy Inc. as well as stocks in “the next rung down” -- Hess Corp., Cenovus Energy Inc., Anadarko Petroleum Corp., Encana Corp., Continental Resources Inc. and Whiting Petroleum Corp. While the bank predicts WTI crude prices will average $35 a barrel in the second quarter, it forecasts $38 for 2016 and $57.50 for next year.
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Terry Starling, a Raymond James energy sector analyst, will be opening our luncheon in Houston on Monday, April 25 with their prediction of where oil prices are heading.
Technical analysis of oil price: http://www.investing.com/analysis/more- ... -200124327