Moody’s slashes 2016 oil price forecasts by $8-10/bbl
The credit agency cited prolonged oversupply issues as the main reason behind their decision to downwardly revise their price forecasts. Moody’s reported that OPEC’s decision not to cut oil production at their meeting in Vienna earlier this month and extra supply from Iran will also exert further downward pressure on oil markets.
Meanwhile, according to Moody’s, global oil demand will increase by around 1.3 million barrels per day (bpd) next year, stronger than their previous projections due to higher demand from countries such as the US, China, India and Russia. However, the credit agency said that OPEC’s decision not to curb production will offset growing global demand and will keep oil supplies long.
For 2017 and 2018, Moody’s expects both Brent and NYMEX crude oil futures to increase by $5/barrel in both years.
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