Oil: Citi thinks oil market should bottom sometime between end 1Q and beginning Q2 and significantly lower prices than US$40, possibly even US$20 for a while.
But between now and end 2016, Citi thinks V-shaped recovery is more possible, if the market underestimates demand and overestimates supply robustness. Citi revises base case forecast of Brent to US$54/bbl for 2015. And 4Q14 Brent at US$75.
Beyond 2016, Citi thinks W-shaped recovery is most plausible, as the barometer shifts towards “call on shale” than “call on OPEC”. Low prices will squeeze shale oil output growth and price recovery resulting in a robust US supply response creating another price dip and a recover to a new equilibrium level.
No comments:
Post a Comment