Crude oil prices are poised to fall below half where they were six months ago, before producers began dealing with a global glut.
Brent, the global benchmark, will slide to as low as $50 a barrel in 2015, according to the median in a Bloomberg survey today of 17 analysts, down from the $115.71 a barrel high for the year on June 19. The grade has already collapsed 47% since then and needs to fall further before producers clear the current glut, said five out of six respondents who gave a reason.
Brent futures sank to a five-year low today, two weeks after the Organization of the Petroleum Exporting Countries decided to maintain output even as the highest U.S. production in three decades swells a global surplus. The organization will stand by its decision even if prices fall to $40, United Arab Emirates Energy Minister Suhail Al-Mazrouei said on Sunday.
“This won’t stop until oil producers are on their backs,” Bjarne Schieldrop, chief commodities analyst at SEB AB, Sweden’s fourth-biggest bank, tells Bloomberg. “There will be better demand in the second half, hopefully some demand effects from lower prices, and definitely softer growth in U.S. shale.” Read the full story.
