Oil Cover

Oil Market Snapshot — September 2015

  • Brent traded at $47/bbl on 28th September, down by nearly 3% after equities fell on Wall Street and China posted weak economic data.
  • Throughout the rest of the month, Brent was trading between $46-$50/bbl after significant volatility at the end of August.
  • Our 2015 and 2016 oil price forecasts remain unchanged. Our forecast for strong global oil demand growth in 2015 is also unchanged.
  • Long lead times mean nearly 4 million b/d of already commissioned offshore peak capacity installed by 2016 and a potential 7 million b/d by 2018 representing capex of $746 billion. However, we forecast a net decline in global production capacity over this period as decline from existing fields outpaces additions.
  • We expect industry to focus on cost efficiency with more collaboration, standardisation and process simplification.
  • We expect 4Q2015 to mark the beginning of a downturn in US LTO production as financing dries up.

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