Near-Term Oil Outlook Hazy; Long-Term Intact

J. MARSHALL ADKINS, Raymond James (09/13/2010)
"The substantive outlook for 2011 global oil demand has minimally changed in the past few months, but it has certainly become more doubtful, with increased bias to the downside. Thus, everything else being equal, we are somewhat less bullish on oil for 2011 than we were in July, which warrants a modest cut in our 2011 oil price forecast from $90/Bbl to $80/Bbl. We are also taking down our Q410 estimate from $80/Bbl to $75/Bbl, yielding a full-year average of ~$76/bbl. It is, indeed, a rare occurrence for our forward-year oil forecast to be below consensus and in line with the strip, but the simple reality is that we see few upside oil catalysts over the next six months (barring, say, war with Iran). On the other hand, there are plenty of potential concerns on the oil demand side. In the spirit of ending on a positive note, we would underscore that, notwithstanding the near-term uncertainty, we remain confident oil prices will climb into the triple digits in the next few years as OPEC's spare capacity gradually melts away. Thus, our long-term oil price forecast of $95 is still meaningfully higher than our 2011 estimate."

 PRINT THIS PAGE   EMAIL THIS PAGE

Under SEC rules, analysts are required to disclose their interest in securities that they cover. We strongly encourage you to contact them to understand any potential conflicts of interest they may have.

Related Quotes: