Nitesh Shah (Wisdom Tree) | With the coronavirus spreading around the world, the market is understandably scared that demand for crude oil will fall hard this year. Brent oil prices have fallen from a peak of US$68/barrel in the first week of January to US$56/barrel currently (24/02/2020). We believe that the backwardation in the Brent oil futures curve is generated by the fact that OPEC is ready to intervene.
Morgan Stanley | The increase on the demand side, with inventories at 5-year minimums and the new martime transport regulation, leads us to raise our forecasts for oil prices to $90 in Q1 2020.
The Crown Prince and de-facto ruler of the Saudi Arabia, Mohammed bin Salman, (MBS) launched an anti-corruption drive to safeguard the reform and modernization of the Saudi economy. Oil meanwhile looks to have broken out to the upside, which is very much a function of Brent Crude rather than West Texas Intermediate. The gap down started to open in August with Hurricane Harvey, not now with Saudi developments.
BARCLAYS | New unplanned outages look unlikely to abate in the next couple of months, which have contributed to a tighter 1H16 oil market balance and new variability in the price forecast.