Jadwa Investment’s just released Quarterly Oil Market Update (Q1 2015) found a widening glut in the supply of oil globally, putting downward pressure on the price on international indices.
The Riyadh-based bank said that it now estimates an average price of oil at $61 per barrel in 2015, down from $79.
U.S. Oil Production Growth
“The widening of global oil surplus to 2 million barrels per day (mbpd) led to Brent prices dropping by 29 percent, quarter-on-quarter, to $54 per barrel in Q1 2015. Oil markets will continue to see large surpluses in Q2 & Q3 2015,” Jadwa writes. “As a result we see full year Brent crude now averaging $61 per barrel, down from $79 per barrel previously.”
Although Jadwa Investment found that slower shale oil growth and improved global economic growth will result in a more sustained rise in price – this will likely only take place “in the last quarter of 2015”
U.S. Rig Count vs Production Per Rig.
Jadwa also revised upward Saudi Arabia’s projected GDP growth this year, to 3.3 percent year-on-year, “because we believe oil sector growth will be higher than previously anticipated,” the firm said.
