Analysts Not Surprised by Move into Bear Territory
Analysts at Cantor Fitzgerald Europe (CFE) are not surprised by the move into bear territory, according to Ashley Kelty, an oil and gas research analyst at CFE.
“We are not hugely surprised by the move into bear territory, given the waivers granted to eight countries by the US from Iran sanctions, and the rumours of Russia and Saudi Arabia discussing possible production cuts next year. This signals that the likelihood of oversupply in the near term is far more likely,” Kelty said in an emailed statement sent to Rigzone on Friday.
“The surprise has been the talk that the Saudis are looking into a breakup of the OPEC cartel, and whilst this would take a long time to happen, it is a remarkable change in outlook for the market, and this will only unsettle already jittery traders,” Kelty added.
“Until we get some more clarity on whether the United States and China will kiss and make up, the demand outlook continues to look negative. As before we would not be surprised to see Brent testing the $65 level in the near term,” Kelty continued.
In a television interview with Bloomberg on November 12, Guy Wolf, global head of market analytics at London-headquartered commodity broker Marex Spectron, said, “I wouldn’t expect to see prices materially below say $65 per barrel”.
“If we get below that sort of level it’s going to be indicating that we’re in a significantly more serious global growth slowdown than we currently think we are,” Wolf told Bloomberg.
The Wall Street Journal reported last week that Saudi Arabia was researching the possible impact of a breakup of the oil producers’ group. CNBC reported Monday however that Saudi Arabia's energy minister said there are no plans to abolish OPEC.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.