The sell-side is worried…
SocGen’s head of oil research Mike Wittner warns “this will reverberate for years”… (via Bloomberg)
OPEC decision to keep output target is “unambiguously bearish,”
“We are entering a new era for oil prices, where the market itself will manage supply, no longer Saudi Arabia and OPEC”
“It’s huge,” he says by phone from New York. “This is a signal that they’re throwing in the towel. The markets have changed for many years to come”
“The change is that it’s no longer Saudi Arabia and OPEC that are going to be managing the supply side of the market. It doesn’t sound like much, but that is so fundamental, it is hard to overstate”: Wittner by phone
“This will reverberate for years,” adding, it will “bring on lower prices and let the market do the job of throttling U.S. shale oil growth”
U.S. shale output unlikely to contract for 1-2 yrs amid lower prices
Goldman warns another large leg lower in Brent oil prices to near $60/bbl would not be sustainable beyond a few months (absent significant demand weakness) as it would accelerate the rebalancing of the oil market with Canadian oil sands and US shale oil projects reaching their production variable costs
