Among Wall Street traders who focus on oil futures contracts, there is an eerie quiet. Crude oil prices had been in freefall for nearly a month, but have suddenly stabilized with West Texas Intermediate Crude, or WTI, hovering in the low $80’s. Does that mean the sell-off has ended and current prices are the “new normal?” A quick summary of Wall Street comments provides a range of opinions: — BMO Securities: “We believe that crude oil prices could remain relatively weak over the balance of the year due to reduced appetite for risk, but forecast US$100/barrel long-run.” — Merrill Lynch:… Read More
Among Wall Street traders who focus on oil futures contracts, there is an eerie quiet. Crude oil prices had been in freefall for nearly a month, but have suddenly stabilized with West Texas Intermediate Crude, or WTI, hovering in the low $80’s. Does that mean the sell-off has ended and current prices are the “new normal?” A quick summary of Wall Street comments provides a range of opinions: — BMO Securities: “We believe that crude oil prices could remain relatively weak over the balance of the year due to reduced appetite for risk, but forecast US$100/barrel long-run.” — Merrill Lynch: “Global oil prices have already come down substantially and we expect a positive demand response coming into next year (pushing WTI back to $90).” — Credit Suisse: oil will slide further into the upper $70’s. — Citigroup: Unless an export ban is lifted, surging U.S. oil production means “WTI could fall to as low as $75.” These analysts also think that Iraq, Iran and Libya have the potential to sharply boost output in 2015, based on the outcome of current conflicts. In other words, oil prices may soon rebound, stay range-bound or fall further. Nobody really knows. What… Read More