Raymond James on crude prices. report just out by Raymond James is particularly bearish.
They are looking for oil to get as low as $65 in the next 12
months.
They write in the report, “The downside risk we saw in oil
prices has started sooner than we had expected, due primarily
to demand fears spurred by a flare-up of the European
debt crisis and negative economic data points across the
globe. That said, we continue to see downside pressure for
oil prices into 2013, as our oil model points to a severely
oversupplied global oil market.
While lower demand is part of the story, robust production
growth in the U.S. is the monster lurking in the shadows. We
expect this bogeyman to fully show himself before the end of
this year. Accordingly, we believe Saudi will begin to noticeably
cut production in 4Q12, while U.S. producers will begin to
curb activity in upcoming weeks. Combining the U.S.-driven
resurgence in non-OPEC supply with our lackluster demand
expectations, we believe that once the market’s focus shifts
from demand to supply, the picture will get uglier.
Thus, we are lowering our 2013 price forecast to $65/Bbl
for WTI and $80/Bbl for Brent – both well below the futures
strip and consensus estimates. We are also lowering our
long-term (10-year) WTI forecast to $80/Bbl, while keeping our
long-term Brent assumption at $95/Bbl.”