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Oil prices to remain in a lower range around USD80-90/bbl – DB

FXStreet (Barcelona) - Analysts at Deutsche Bank view supply cuts to keep the Oil prices stable in the USD 80-90/bbl range.

Key Quotes

“More broadly, to recap Deutsche Bank’s house view on oil, the fall in oil prices is mostly supply-driven but also reflects downgrades to global demand.”

“Specifically, supply growth, especially from non-OPEC countries such as US, Brazil, and Cadana, outstrips global demand, which is depressed by China slowdown. Therefore, only a cut in production could help stabilize prices.”

“In our view, lack of OPEC action will mostly likely push Brent toward USD70/bbl, before supply cuts lift prices back to USD80-90/bbl range. These lower oil prices are positive for global growth, adding 0.2-0.4pp to global GDP in 2015.”

“The impact is not evenly split, with net oil importers (Turkey, South Africa, etc) set to benefit at the expense of producers, among which Venezuela and Russia stand to be the biggest losers, while some like Saudi Arabia have resources to withstand lower prices for longer.”

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