Benchmark US crude oil prices – which have fallen more than $60- barrel since June 2014 to below $45 yesterday – are on their the way to the $40-barrel threshold, Wall Street was warning last night after N. Sea crude closed deep in the doldrums yesterday at just over $45-barrel.
Major merchant bankers Societe Generale, Bank of America and Goldman Sachs warned that US crude oil benchmark West Texas Intermediate needs to remain near $40 during the first half to deter investment in new supplies that would add to the glut.
“The markets are continuing to price in huge oversupply in the first half of 2015,” said Mike Wittner, head of research at Societe Generale. “We’re going to go below $40.”
Future of North Sea oil industry is on a precipice if Saudis let prices slide to $20-barrel
Read the full article in Scottish Energy News: http://goo.gl/qxW8AR
If Brent crude falls to $40 barrel, oil companies will start shutting down production wells
Read the full article in Scottish Energy News – http://goo.gl/fUvMRE
Oil is seeking a “new equilibrium” as the Organisation of Petroleum Exporting Countries abandons its role of keeping supply and demand aligned, according to Goldman. Prices are poised to drop further, testing the ability of U.S. shale drillers to keep pumping in the midst of the greatest oil price slump since the 2008 Banking Crash.
The oil price rout may continue to $35 a barrel in the near term because both oil supply and demand will have a delayed reaction to falling prices, said Francisco Blanch, head of commodities research at Bank of America.
The US is pumping oil at the fastest pace in more than 30 years, making it nearly self-sufficient in oil, helped by a drilling boom that’s unlocked supplies from shale formations in Texas and North Dakota.