{"id":6630,"date":"2016-06-20T13:16:09","date_gmt":"2016-06-20T18:16:09","guid":{"rendered":"http:\/\/nrgibroker.com\/?p=6630"},"modified":"2016-08-21T14:50:32","modified_gmt":"2016-08-21T19:50:32","slug":"raymond-james-get-ready-for-80-oil","status":"publish","type":"post","link":"https:\/\/nrgibroker.com\/en\/raymond-james-get-ready-for-80-oil\/","title":{"rendered":"Raymond James: Get Ready for $80 Oil"},"content":{"rendered":"

Rebounding after a two-year collapse, it’s only this month that oil\u00a0prices have\u00a0pushed up past\u00a0$50 a barrel, but Raymond James & Associates\u00a0says this is just\u00a0the beginning for\u00a0higher prices.<\/span><\/h3>\n

In a note to clients, analysts led by J. Marshall Adkins say West Texas Intermediate will average\u00a0$80 per barrel by the end of next year \u2014 that’s higher than all but one of the 31\u00a0analysts surveyed by Bloomberg.\u00a0<\/span><\/h3>\n

“Over the past few months, we’ve gained even more confidence that tightening global oil supply\/demand\u00a0dynamics will support a much higher level of oil prices in 2017,” the team says. “We continue to believe that 2017 WTI oil prices will average about\u00a0$30\/barrel\u00a0higher than current futures strip prices would\u00a0indicate.”<\/span><\/h3>\n

The team went on to lay out three reasons for their bullish call, all of which are tied to global supply\u00a0\u2014\u00a0the primary factor that precipitated crude’s massive decline.<\/span><\/h3>\n

Here’s how the rebalancing of the global oil market\u00a0will be\u00a0expedited from the supply side, according to the analysts:<\/span><\/h3>\n

First, the analysts see production outside the U.S. being curbed by more than they had previously anticipated, which constitutes 400,000 fewer barrels of oil per day being produced in 2017 relative to their January estimate. In particular, they cite organic declines in China, Columbia, Angola, and Mexico as prompting this downward revision.<\/span><\/h3>\n

“When oil drilling activity collapses, oil supply goes down too!,” writes Raymond James. “Amazing, huh?”<\/span><\/h3>\n

Adkins and his fellow analysts also note that the unusually large slew\u00a0of unplanned supply outages\u00a0will, in some cases, persist throughout 2017, taking a further\u00a0300,000 barrels per day out of global supply.<\/span><\/h3>\n

Finally, U.S. shale producers won’t be able to get their DUCs in a row to respond to higher prices by ramping up output, the team reasons, citing bottlenecks that include a limited available pool of labor and equipment.<\/span><\/h3>\n

Combine this supply curtailment\u00a0with firmer than expected global demand tied to gasoline consumption, and Adkins has a\u00a0recipe for $80 crude in relatively short order.<\/span><\/h3>\n

“These newer oil supply\/demand estimates are meaningfully more bullish than at the beginning of the year,” he writes.\u00a0“Our previous price forecast was considerably more bullish than current Street consensus, and our new forecast is even more so.”<\/span><\/h3>\n

The only analyst with a higher price forecast for 2017, among those surveyed by Bloomberg, is Incrementum AG Partner Ronald Stoeferle. He sees West Texas Intermediate at $82 per barrel next year. The consensus estimate is for this grade of crude to average $54 per barrel in 2017.<\/span><\/h3>\n

Over the long haul, however, Raymond James’ team sees WTI prices moderating to about $70 per barrel.<\/span><\/h3>\n

\"\"<\/a><\/h3>\n

Copyright: Rig Zone<\/a><\/span><\/h3>\n","protected":false},"excerpt":{"rendered":"

Rebounding after a two-year collapse, it’s only this month that oil\u00a0prices have\u00a0pushed up past\u00a0$50 a barrel, but Raymond James & Associates\u00a0says this is just\u00a0the beginning for\u00a0higher prices. In a note to clients, analysts led by J. Marshall Adkins say West Texas Intermediate will average\u00a0$80 per barrel by the end of next year \u2014 that’s higher […]<\/p>\n","protected":false},"author":1,"featured_media":6633,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1017],"tags":[426,853,854,208,298,856,302,855,852],"class_list":["post-6630","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-barrel","tag-barrel-cost","tag-crude","tag-oil","tag-oil-demand","tag-oil-drilling","tag-oil-prices","tag-oil-supply","tag-west-texas"],"_links":{"self":[{"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/posts\/6630","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/comments?post=6630"}],"version-history":[{"count":0,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/posts\/6630\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/media\/6633"}],"wp:attachment":[{"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/media?parent=6630"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/categories?post=6630"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nrgibroker.com\/en\/wp-json\/wp\/v2\/tags?post=6630"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}