Wide Range of Price Outlooks as Oil Experts React to Crude Hitting a 6-Year Low

Interesting Bloomberg report on Aug 13, 2015

Huge variance in expert outlooks on crude oil prices…

Oil and gas restructuring specialist John Castellano at AlixPartners in Chicago describes the prediction process this way: “we view it more as shark teeth” he said

He is describing prices that could bounce between $45 and $65 a barrel over the next few years. “This is more like a new normal in this price range,” he explains.

Most analysts, in the meantime, predict that oil prices will slowly recover, or at least won’t get any worse, by the end of next year. One, Natixis SA is on the low end among those surveyed by Bloomberg at $46 a barrel.

Another Standard Chartered Plc analysts are forecasting prices will rebound to $85 a barrel by the fourth quarter of 2016.

Depending on your measurement point, that is a 45% to 85% range. And both are professional estimates.

On a more modest level, Morgan Stanley researchers saw a “modest recovery and higher prices” over a 9 month period into this year’s end back 4 months ago in an April 12 research report. In the meantime, crude prices have fallen by almost 19 percent.

OOPS!

They have now revised their outlook by telling investors this could be worse than the oil rout of 1986.

Most experts seem befuddled by the market. Who is an expert you can trust.

Meanwhile, one refinery closing for normal plant maintenance near Chicago this week…    … and the local street price per gallon jumps about 22% almost overnight across a 4-state region.

Whose forecast can we trust? Is this downward overall economic cycle worse than that of 2007-09?

Oil price drop will help truckers more than freight railroads.

To read the entire article, go to http://bloom.bg/1JW4jEN

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