Market Insights

September 29, 2015 • Posted in Market Insights

Week of September 28, 2015

Energy/Economy Overview

  • The energy price outlook remains cloudy as both WTI and Brent crude prices moved up by about $1/bbl vs. last week after U.S. weekly oil rig count showed a fourth consecutive drop in the number of active rigs
  • Some traders and analysts are pessimistic that oil will continue trading higher in the coming weeks due to mixed outlooks for supply and demand and for the global economy
  • Credit ratings agency Standard & Poor’s said that marginal production costs in the USA will fall due to improved drilling efficiencies, meaning production will decline less than expected
  • Based on this, S&P cut its Brent and WTI forecasts by $5 to $50 per barrel and $45 per barrel respectively for this year and forecasted average 2016 prices at $55 for Brent and $50 for WTI
  • North American natural gas storage inventories will likely reach a new record high in 2015 owing to continued Appalachian production growth and pipeline expansions
  • Production growth and efficiency improvements could keep annual average US natural gas prices below $3/MMBtu for the next few years, which will keep ethane, propane and butane feedstock costs low

WTI Crude Oil And Brent Crude Oil 042815

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