The summary of Market info as of 13 Nov 2014 is as follows:
- Several US shale oil producers plan on increasing production even though Saudi take the price of crude sold to US down to $ $70 or even 60/bbl. It sign that the economics of shale oil is still viable at 60
- OPEC reported, they pumped 30.253 million barrels a day in October, a decrease of 226,400 barrels, the largest since March. There is an indication that Saudi Arabia has led declines in the group’s oil output.
- The result of this “battle” will be determined after OPEC meeting held on 27 Nov, whether Saudi is willing to cut the production or not.
- Brent crude fell below $80 a barrel for the first time in four years on speculation OPEC won’t eliminate a global supply glut (Bloomberg, 13 Nov). EIA projects that Brent crude oil prices will average $84.5/bbl in fourth-quarter 2014 and $83.4/bbl in 2015, down more than $10 difference from the previous forecast.
Using the methodology of Error Correction Mechanism (ECM) developed by Engle-Grager (2003 Economics Nobel Award) , we update the SLC (Sumateran Light Crude/Minas) forecast is as follows:
Based on the graph, we estimate November SLC will continue down to $78.3/bbl and 2014 SLC will average down to $ 100.3/bbl versus the October projection of $ 103.9/bbl
Disclaimer: The material is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Opinions expressed are our current opinions as of the date appearing on this material only and would be updated every month.
Disclaimer: The material is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Opinions expressed are our current opinions as of the date appearing on this material only and would be updated every month.