USD 65 per barrel: no more upside potential?
We think that the current oil price of USD 65 per barrel is within its equilibrium range, which we believe lies between USD 60-70 per barrel:
- We expect demand to continue rising, especially in Asian countries including China and India
- Our view is that additional demand would be primarily covered by supplies from the United States. The breakeven point for US producers lies between USD 60-65 per barrel
- We believe the OPEC+ group is likely to take steps to support the balance in oil supply/demand. The group is due to meet at the start of December to discuss the issue. However, Saudi Arabia has already announced it will cut its output in December.