In a new report, Macquarie Research analyst Vikas Dwivedi discussed the firm’s outlook for crude oil. Overall, Macquarie sees value in the oil market, but investors will need to be extremely patient while the industry rights the ship.
State of affairs
As nuanced as some of the statistics and models for crude oil are, the primary reason oil prices have collapsed is simple supply and demand. The process of eliminating the massive 2 million bpd global crude oil oversupply has already begun, but Macquarie believes that it will not be completely eliminated until 2017.
However, the re-balancing will be aided by what the U.S. Energy Information Administration is projecting to be the highest global demand growth for oil since 2010.
OPEC Not Helping
While U.S. produces have been scaling back rig counts in a major way in response to the supply glut, core OPEC members have simply chosen…
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