Price Deck & Forecast

Price Deck – Watch out for the low in February 2021 Oil prices generally peak in summer, and our bull argument for driving season 2020 has totally failed, with economic recovery from COVID taking longer than expected in the North East US, and re-locking down the south. With oil prices post-2014 OPEC breakdown having hit lows in February 2015, but not bottoming until February 2016, we expect another low in prices over the next three quarters. As of Q3 2020, the market is under-supplied in direct supply vs demand terms. However, the massive overhang of inventory, and further overhang of spare production capacity globally, make it likely that $40/bbl Brent in mid-summer 2020 is the high in prices until next summer, 2021. US refining utilization remains historically low for the time of year, speaking to the weakness of the real market. The oil price has rallied hard, but this is […]