A big oil bull turns bear

From Citi:

Going Down: Libya, Kashagan, Ever Better Shale Economics… OPEC May Have To Act To Hold the Bottom of the $40-50 Range

 Oil prices fell last sharply last week (Brent down 4.7%, WTI down 6.2%), in line with seasonal expectations (see Energy Weekly) and prices remain under bearish pressure with both Libya and Nigeria poised to resume at least some portion of lost production and Kashagan’s long delayed restart now imminent. The market rebalancing that bulls have been looking for is therefore looking less imminent; this is in line with the IEA OMR last week which revised demand growth for 2016 down (to 1.3-m b/d, in line with Citi’s forecasts) and non-OPEC supply up.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.