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发帖数: 452 | 1 Why the Drop in Oil Prices Caught So Many by Surprise
By NICOLE FRIEDMAN
Oct. 28, 2014 3:54 p.m. ET
5 COMMENTS
It isn’t just Wall Street banks like Goldman Sachs Group Inc. that got it
wrong: Energy consultants and even the U.S. government didn’t foresee the
sharp slide in oil prices, which have tumbled 25% since June.
Goldman shocked the market Monday with a call for U.S. prices to fall to $70
a barrel in the second quarter of 2015. Barclays just released its second
price update in three weeks, and other banks are releasing lower forecasts
at least monthly.
What did they miss?
The risk of discord within the Organization of the Petroleum Exporting
Countries and the possibility that violence in some oil-producing nations
wouldn’t interfere with oil production.
For the past three years, oil production in the U.S. has been booming, but
Brent, the global oil benchmark, has largely held above $100 a barrel. That
is because sanctions on Iran and unrest in Libya, Nigeria and elsewhere kept
oil off the market, allowing supply and demand to stay balanced even as U.S
. production grew. Heading into this year, it looked like a pretty good bet
to assume that supplies outside the U.S. would stay constrained, and many
analysts called for Brent to hold above $100 again in 2014.
This summer, those assumptions fell apart as Libyan production came roaring
back, Kurdish output looked set to rise and Iraqi exports held steady
despite an insurgency. At the same time, weak demand in China and the
eurozone came into view. The combination of these factors pressured prices
lower.
Then, the widely shared assumption in the oil market that OPEC would
collectively cut production to keep prices high started to look shaky. Saudi
Arabia, the world’s biggest oil exporter, has indicated in recent weeks
that it is comfortable with a lower oil price, and prices have fallen in
response to these signals.
ENLARGE
Citigroup ’s global head of commodities research, Ed Morse, predicted in a
Barron’s article in March that oil prices could fall to $75 a barrel in the
next five years, a price target that looks far more feasible now than it
did then. But even Citi didn’t anticipate that prices this summer could
fall so far so fast.
The price revisions have been embarrassing for banks, whose customers,
including energy companies and traders, rely on these forecasts for their
own deals and assumptions.
The U.S. Energy Information Administration was also caught by surprise. The
agency, which releases month-by-month forecasts, called for Brent to average
$102 a barrel this month in the forecast released in December. By July, the
EIA was saying that Brent would average $110 a barrel in October. In its
latest forecast, released Oct. 7, the EIA settled on a $97 a barrel average
for this month.
But as EIA Administrator and former Deutsche Bank analyst Adam Sieminski
joked in a presentation in New York last week, his forecasts have been right
only about 60% of the time.
Brent is currently trading around $86 a barrel and has averaged $88.42 a
barrel so far this month, according to FactSet.
Write to Nicole Friedman at [email protected]
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