© Abhishek Deshpande
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I agree with the statement, since the return of Iranian oil definitely gives a bearish signal to oil markets, especially with as much as close to 500-800 thousand barrels per day. Additional crude oil will potentially join the markets, but not as soon as June 30. Moreover, it is a large amount of oil to enter global market at a time, when markets are already fundamentally weak, with supply outpacing demand. Thus, we are definitely bearish on oil price in the long term.
There is likely to be far more oil going into storage and building the inventory levels over and above what we are seeing right now. Talking about how much pressure we expect on prices, we must admit that before the Iranian sanctions our forecasts were close to $57 per barrel, and then raising to $63 per barrel in 2016. However, with the Iranian oil back in the market potentially, let's say, in the Q3 to Q4 of this year, and with no changes in OPEC policy, we anticipate prices to stay under pressure for at least next couple of years, which could probably be under $50.
Few investors expect the Organization of the Petroleum Exporting Countries, which pumps around a third of the world's oil, to restrain production to help push up prices. How likely it is to happen?
I agree with the statement, since the return of Iranian oil definitely gives a bearish signal on oil markets, especially with as much as close to 500-800 thousand barrel per day. Additional crude oil will potentially join the markets, but not as soon as June 30. Moreover, it is a large amount of oil to enter global market at the time, when markets are already fundamentally weak with supply outpacing demand. Thus, we are definitely bearish on oil price in the long term, as well I would say.
That is likely to be far more oil going into storage and building the inventory levels over and about what we are seeing right now. Talking about how much pressure we expect on prices, we must admit that before the Iranian sanctions our forecasts were close to $57 per barrel, and then raising to $63 per barrel in 2016. However, with Iranian oil back in the market potentially, let say in the Q3 to Q4 of this year, with no changes in OPEC policy, we anticipate prices to stay under pressure for at least next couple of years, which could probably be under $50.
What is your forecast for oil prices for the Q2 of this year?
We still remain bearish on Brent and we are looking at prices to reach $50 per barrel for the Q2 of 2015.