OMS-November-2015

Oil Market Snapshot — November 2015

  • Brent prices recovered significantly by 6.5% to c. $46/bbl from around $43/bbl on 16th November, as Saudi Arabia indicated willingness to support oil prices and tensions flared between Russia and Turkey
  • Our reference case for 2015 and 2016 Brent prices remains broadly unchanged at $53.59/bbl for 2015 and $56.60/bbl for 2016
  • Our demand forecasts stand at 1.5 million b/d annual growth for both 2015 and 2016; -0.3 million b/d for 2015 and +0.3 million b/d for 2016, 17% below and 25% above IEA projections respectively
  • We see global production growth of only 0.77 million b/d based on an LTO decline of 916,000 b/d in 2016, but for oversupply to continue into 2016
  • We expect OPEC to hold firm to its production strategy at its December meeting as the necessary consensus for change is likely to remain elusive
  • Decommissioning activity in the UK North Sea is expected to increase significantly over the next decade, exacerbated by the oil price collapse

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