FXStreet (Edinburgh) – Analyst at BAML Sabine Schels sees the barrel of crude oil gathering traction towards year-end.
Key Quotes
“Looking at the near-term, however, we still believe oil prices will rebound into year-end on a combination of factors”.
“First, we see an accelerating decline in non-OPEC oil supply kicking in over the next few months, with US oil output alone set to drop by 1 million b/d by 2H16”.
“Second, increased Chinese and EM monetary stimulus could lend temporary support to oil demand”.
“Last but not least, global oil consumption will pick up on a seasonal basis by more than 1 million b/d heading into the winter, preventing further stock builds near-term”.
“Moreover, we now project Brent-WTI spreads to trade at around $2/bbl on average in 2016 and 2017, against an average of $11/bbl in the last 5 years”.
(Market News Provided by FXstreet)