Oil Market Snapshot
Brent has stabilised at below $50/bbl for more than a week now after losing 60% since its June 2014 peak of $115.19/bbl. The price slide continued throughout December with the market remaining oversupplied in Q4 2014. The market reaction to OPEC’s decision to maintain production has been a price drop of a magnitude that had not been envisaged by most traders.Oil Market Snapshot
We have revised our forecasts for yearly average Brent downwards to $99.33/bbl (from $101.13/bbl) and $67.84/bbl (from $81.78/bbl) for 2014 and 2015 respectively; but our preliminary price projection for 2016 is at $85.18/bbl. We expect widespread cuts in E&P investments, with US LTO being the most exposed while oil sands and ultra-deepwater likely to continue due to their longer investment cycles. US LTO rig count has fallen by 39 units within two weeks in a swift reaction to price fall, further reductions are likely.LNG Market Snapshot
9 additions pushed the global LNGC fleet to 384 vessels. Meanwhile the order book expanded to 124 units. Spot charter rates have not cracked $75,000/day in almost a year amid vessel oversupply - vessel efficiency is key. The Atlantic Basin commands more of ship owners' attention but the Pacific is likely to remain the main LNG theatre until 2020.
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