Rebound in oil prices expected in H2-2015: Poll

25-Dec-14

Crude oil prices are likely to bottom out in H1-2015, until a possible slowdown in US shale production counters a supply glut exacerbated by OPEC's decision not to cut output, as per a Reuters survey. An agreement reached by OPEC in November to continue with maintaining output meant the onus for any supply cutbacks was now on non-OPEC producers, primarily led by US shale oil, analysts said. Oil prices will be lower, making shale oil production less attractive for investments, which are necessary to keep shale oil production growing," Commerzbank's Carsten Fritsch said. A survey of 30 economists and analysts projected Brent to average US$74 a barrel next year. "Supply cuts above this level will be limited to other smaller, high-cost US and Canadian unconventional oil producers. Although we think it will take six to 12 months for these supply cuts to become apparent," she added. Some analysts, however, were sceptical whether OPEC's stand would serve as a deterrent to US shale oil producers.