Goldman Sachs report (read Nick Cunningham Jun 03 article) discusses Permian pipeline bottleneck relief. Brent $60 next year. Reality dawns on Oil Mkt.

[Falcon + 222]

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New pipelines and new export capacity along the U.S. Gulf Coast should “lower the global marginal cost of production,” Goldman analysts argued. The addition of new U.S. supply, and its integration into the global market, should narrow the difference between WTI and Brent.

Ultimately, that presents a “multi-year threat to the market share and revenues” of OPEC+ producers. As a result, Goldman sees Brent falling from $72.50 in the second quarter to $65.50 in the third quarter, and then down to $60 per barrel next year.

The prospect of higher U.S. shale output and weakening demand from the trade wars does not bode well for oil prices. In the short run, however, the OPEC+ production cuts should prevent a much deeper downturn.

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OPEC+ Has Only One Choice As Oil Slides

Nick Cunningham June 3

https://oilprice.com/Energy/Crude-Oil/OPEC-Has-Only-One-Choice-As-Oil-Prices-Slide.html

 

The Brent oil price already close to $60 now. What happens when the Permian bottleneck starts to ease Q3 2019 to Q2 2020 ?

Edited June 11, 2019 by Falcon