BofAML: El petróleo coquetea con nuevos mínimos (Global Energy Weekly)

Redacción - Martes, 28 de Julio

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Global Energy Weekly: Oil flirting with fresh lows •   With seasonal demand weakness and renewed USD strength, we lower our end-of-3Q15 target to $45/bbl for WTI and $50 for Brent •   We stick to our average 2016 forecast of $62/bbl for Brent and $57 for WTI, as lower non-OPEC output offset Iranian increases

China, Iran, USD and seasonality may keep pushing oil lower 

The much feared double-dip is here. As the US driving season peaked on July 4, WTI and Brent crude oil prices faltered and are down by over $11 and $9/bbl, respectively. Also, oil prices have suffered from negative macro news from China and renewed strength in the trade-weighted USD. To top it up, an Iranian nuclear deal has allowed more barrels to seep into the market from floating storage, with the first cargo already hitting East Africa's shores. Seasonal demand weakness and renewed USD strength could continue to press oil lower going forward. So we lower our near-term end-of-3Q15 targets to $45/bbl for WTI, from $50/bbl prior, and to $50/bbl for Brent, from $54/bbl prior. 

As GDP growth is weak, demand is very reliant on low prices  

The imbalance between global oil supply and demand peaked in 2Q15. But the glut in the coming quarters will still continue, averaging 1 million b/d over the next 18 months. OPEC is largely to blame for this imbalance, with Saudi Arabia, Iraq, the UAE and now Iran raising crude output into a falling price environment. In non-OPEC, output also defied expectations of sharper declines. Russia and Brazil have increased oil output this year as corporate profits were protected by local FX adjustments. On a positive note, oil demand has surprised to the upside but only due to low oil prices, as cyclical drivers remain weak. We believe demand can continue to absorb some of the imbalances, provided prices stay low.  

A vast reduction in shale output could be oil's saving grace 

The one piece of good news is that reduced well completions and declines in capex should have an impact on shale output by 1Q16. So shale oil output should roll over. Hedging has dried up and lower oil prices coupled with higher oil vol should curb capital available to highly levered shale companies. Net, we now see total US liquid production drop in 2016, bringing non-OPEC output down 420 thousand b/d YoY, the first decline since 2008. What does that mean for oil prices? For now, we stick to our average 2016 forecast of $62 for Brent and $57/bbl for WTI, as lower non-OPEC output offsets the increased volumes out of Iran. But if cyclical conditions worsen or China experiences a hard landing, oil could head a lot lower.  

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