- Brent fell back towards the $60/bbl mark after the market neared $65/bbl in May, driven by continued OPEC oversupply concerns
- We expect stronger demand growth of 1.44 million b/d for 2015 and 1.51 million b/d for 2016 due to faster economic growth in OECD
- But we still see a current supply surplus, mainly based on very high OPEC production, still resilient US LTO output and full inventories
- The Greek financial crisis could also strengthen the US dollar and add more downward pressure on oil prices
- We have thus lowered our Brent forecast for 2015 and for 2016
- However, if faster decline from other non-OPEC producers persist, a more balanced market could be reached quicker
- We see Big Oil continuing cost cutting over the next two years to at least stabilise returns on investments
- Floater market, as a result, requires further rig retirements to support utilisation rates
by Graham Walker // 30 June, 2015
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