Can the prevailing run surpass the least prices ever in recent history...? this question would take us to absolutely 11.5 years back (which was before April fool's day in 2004 at 33.20 or below).
Answer is here, technically the conviction at $35 or below would be a deciding factor. Well again..we are not being stubborn, neither in love with number 35. We've observed the multi-year charts and coupled these outcomes with below significant fundamentals.
After reading we're pretty sure that you would certainly be able to answer correctly.
Briefing on what has been happened with run so far:
are experiencing what has already been the second-deepest and longest market of the past 45 years, with a decline from their peak of over 55% over the past 4.5 years.
Only the post-Lehman plunge was steeper (61% peak-to-trough), and only the 1981-86 one longer (5.5 years).
The market in commodity currencies has likewise been the second-worst of the post-Bretton Woods era, topped only by the early 1980s rout powered by the 1983-84 Fed tightening cycle.
From their 2011 peak, four have depreciated at least 50% currencies (ARS, BRL , RUB, ZAR ), and five others are down about 30% ( NOK , AUD, COP, CLP , MYR ).
Where is the stoppage supply glut: The global oil supply growth of only 0.3 million barrels per day in 2016 as US crude output falls from a mid-2015 peak of 9.6mbd to 8.8mbd due to record declines in capex (about -25% in 2015 and in 2016). OPEC supply growth should slow from about +1.2mbd in 2015 to +0.8mbd.
The Brent forecast shows a gradual rise over the next four quarters -$48 in Q1, $52 in Q2, $57 in Q3, $62 in Q4 -to reflect tighter balances from slower output growth rather than meaningful demand increases.
Thanks to almighty, among the entire commodity baskets crude oil is the only sector where sufficient supply adjustment is underway to lift prices in 2016.
Hence, our stance likely to persist and $35 is pretty much certain, we want to play it safe and can only smell some attributes after late December. But for now jumping the guns is absurd as the above fundamental developments are yet to factor in gradually in long run contemplating crystal clear confirmation.
We stand pat with our recent hedging stances given in below links, good luck:
Furthermore, other macro aspects cannot be disregarded like chinese recovery in 2016, the tenor of recessionary cycle and EMs demand for oil etc etc... What do you think did US lift off economic sanctions on Iran without any vested interest..? (who knows forecasts help to certain extent, but time is the deciding factor ultimately).