Shocked Goldman by Turn of Oil

Discussion in 'Commodities Forum' started by admin, May 16, 2016.

  1. admin

    admin Administrator Staff Member

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    The global oil market has flipped to a deficit sooner than Goldman Sachs Group Inc. had expected.

    A decline in production driven by unexpected supply disruptions as well as sustained demand have led to a “sudden halt” to the market surplus, Goldman analysts including Damien Courvalin and Jeffrey Currie wrote in a report dated May 15. That’s prompted the bank to raise its U.S. crude price forecast to $50 a barrel for the second half of 2016 from a $45 estimate in March


    The unexpected outages caused by everything from wildfires in Canada and pipeline attacks in Nigeria will keep the market in deficit through the second half of this year, according to Goldman. Still, the return of some of the output and higher-than-expected U.S., North Sea, Iraq and Iran production means the bank predicts the shortfall will be at 400,000 barrels a day versus the 900,000 previously expected. A shift back to a surplus is seen in early 2017, it said.
    “The physical rebalancing of the oil market has finally started,” the Goldman analysts wrote. The changes to forecasts “reflects our long-held view that expectation for long-term surpluses can create near-term shortages and leaves us cyclically bullish but long-term bearish.”

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    Source : http://www.bloomberg.com/news/artic...y-oil-market-s-flip-to-deficit-on-supply-cuts
     
  2. JR Ewing

    JR Ewing Super Moderator Staff Member

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    I love my oil stocks, and I will also love it when the oil company who leases on my land starts drilling again. :D
     
  3. kirtimeliwal

    kirtimeliwal Senior Investor

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    Trading in crude oil offers high liquidity and excellent opportunities to make profit in nearly all market conditions due to its unique standing within the world's economic. Also the price of crude oil fluctuates each moment as it is publicly traded on an exchange. Hence, you should keep yourself updated with its current status before investing.
     
  4. Chartman

    Chartman Senior Investor

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    Is there not more potential, although higher risk, looking to invest in oil companies of a varying size which would be impacted by oil price fluctuations, again to a varying degree.
     

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