Everybody has an opinion on what is going on.
Each year, my major client asks for a "State of the Industry" report. This year, I decided to share it with members of the MRF.
There is great risk to go on record as to what the future might hold. As recently as October 24, 2014, Goldman Sacks predicted Q1 pricing to average $75.00 per bbl.
Standard Chartered Bank's oil analyst Paul Horsnell, known for having called the market's long rally a decade ago, was sticking with a more bullish bias. In the first week of November, 2014, Horsnell and his team cut their first quarter Brent (world oil) forecast to $98.00 per bbl but pared back their forecast for calendar 2015 by just $5.00, to $105.00 a barrel.
At any rate, attached is my fearless prognostication.
Buddy Cotten
Thanks for the report, Buddy, appreciate you sharing it with us. Linton
My pleasure, Linton. I tweaked the report slightly to show a tad bit more information and it is attached hereto.
The tweaking is nothing more than the more complete report to my clients.
Buddy Cotten
1434-OilForecast2015.pdf (381 KB)
Thanks, Buddy, always interested in what you have to say. Linton
Buddy-
Have you ever seen any estimates on where the rig count needs to be to stop increasing supply, i.e. depletion overcomes new production? I would suspect that any old estimates are going to be out of date badly, because of the size of the shale wells, walking rigs, etc.
Wade
I read an estimate yesterday that the oil rig count needs to drop about another 650 from the active rig count reported by Baker Hughes last week.
Buddy
Wade Caldwell said:
Buddy-
Have you ever seen any estimates on where the rig count needs to be to stop increasing supply, i.e. depletion overcomes new production? I would suspect that any old estimates are going to be out of date badly, because of the size of the shale wells, walking rigs, etc.
Ouch. With stored crude stocks still building, it looks more like a certain oceanliner trying to avoid the iceberg. It doesn’t turn on a dime.