20 Mar 2015
Oil prices might move lower in coming months – KBC
FXStreet (Barcelona) - Expecting oil overproduction to continue, the KBC Bank Research Team, remains bearish for oil prices for the coming weeks and months, but maintaining a longer-term bullish outlook.
Key Quotes
“Our longer term outlook for oil prices remains, however, bullish. This view has also been supported by the last EIA’s Drilling Productivity Report which showed that the agency expected a small decline in oil production in three of the key shale oil regions in April.”
“The expected decline in production stems mainly from the falling rig count; in other words, a growth in oil production from (less) new oil wells coming online should be outpaced by a decline of production from legacy wells (which reflects relatively high depletion rates in comparison with “conventional” oil) in Niobara, Eagle Ford and Bakken regions.”
“Nevertheless, …. we still expect overproduction to persist and to push oil prices lower in weeks and months to come and the above mentioned trends should rather play a role later this year.”
“Moreover, we should also keep in mind that the above mentioned conclusions are based on estimates and jury is still out on the actual impact (its strength and timing) of lower oil prices on shale oil production in the US.”
Key Quotes
“Our longer term outlook for oil prices remains, however, bullish. This view has also been supported by the last EIA’s Drilling Productivity Report which showed that the agency expected a small decline in oil production in three of the key shale oil regions in April.”
“The expected decline in production stems mainly from the falling rig count; in other words, a growth in oil production from (less) new oil wells coming online should be outpaced by a decline of production from legacy wells (which reflects relatively high depletion rates in comparison with “conventional” oil) in Niobara, Eagle Ford and Bakken regions.”
“Nevertheless, …. we still expect overproduction to persist and to push oil prices lower in weeks and months to come and the above mentioned trends should rather play a role later this year.”
“Moreover, we should also keep in mind that the above mentioned conclusions are based on estimates and jury is still out on the actual impact (its strength and timing) of lower oil prices on shale oil production in the US.”