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Deutsche slashes oil price outlook

  • Booming U.S. production and the prospect of easing supply disruptions in the Middle East and North Africa has Deutsche Bank cutting its 2014 estimate for WTI crude by a whopping $10 per barrel to $88.75. At the moment, WTI is at $98.50, up 1.2% on today's session.
  • "We see the growing risk of an oil supply glut developing," says Michael Lewis, the bank's head of commodity research.
  • Any dip in price may be temporary though, as Deutsche expects OPEC to cut production to defend prices - a move likely to be successful, says the bank, due to its upbeat outlook for world growth.
  • Deutsche is also dour about the refiners, noting the current capacity glut is growing thanks to rapid and sizable expansions in Asia and the MIddle East. The industry would need to shut about 2M barrels/day of refining capacity (2% of the market) to balance the market, says the bank.
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Comments (4)
  • Jack Hutchison
    , contributor
    Comments (331) | Send Message
     
    Gee. I wonder if the improvement in worldwide economies would have a positive effect on oil pricing.

     

    Sounds to me like Michael Lewis is on the pump and dump bandwagon. The market gave him the finger.
    10 Dec 2013, 09:23 AM Reply Like
  • tonyeg
    , contributor
    Comments (146) | Send Message
     
    Looks like no oil price inflation here for the next decade. Peace in the middle east? Who cares if they shut down the straight of Hormuz. Iran is opening their oil fields to foreign investment. French Total got the deal they wanted from Iran. Iraq is pumping more oil than ever. Saudis may have to pump more to teach Iraq and Iran not to pump too much by bringing the price lower to show who is in charge of OPEC. Saudis are pissed with Obama, no reason to keep price high to help USA oil investment and help Obama green agenda. Mexico is opening up their national oil company to foreign investment. Did I forget to mention competition from natural gas. Oil WTI is going to below $70. Gold is going to go down as well.
    10 Dec 2013, 01:06 PM Reply Like
  • Jack Hutchison
    , contributor
    Comments (331) | Send Message
     
    You failed to mention the strong correlation between GDP and energy consumption.

     

    Burn, baby. Burn.
    11 Dec 2013, 09:02 AM Reply Like
  • tonyeg
    , contributor
    Comments (146) | Send Message
     
    Yep.
    12 Dec 2013, 07:05 PM Reply Like
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