CICC News on November 21 , HSBC lowered its Brent crude oil forecast for next year by US$5, but added that it does not believe that oil prices will continue to be weak in 2015.
HSBC: Oil prices may reach $95/barrel in 2015
HSBC lowered the full-year Brent crude oil price next year from $95 to $90, but expected short-term price pressures to "sow the seeds" for longer-term increases.
HSBC also lowered its Brent crude oil price forecast for the fourth quarter of this year from $92 to $85.
The forecast runs counter to many other market forecasts, including the International Energy Agency (IEA), which said oil prices could fall further in 2015 to their lowest levels since 2010 below $80 a barrel.
The International Energy Agency said in its monthly oil market report last week that "while there is some speculation, the high cost of unconventional oil production could set Brent oil prices in a new equilibrium range between $80 and $80." 90, but the supply-demand imbalance suggests the price collapse is not over yet."
HSBC said significant risks that could cause oil price movements remained, with the annual OPEC meeting next week "being key."
HSBC analyst Gordon Gray said, "If OPEC does not cut production, the market may still be seriously oversupplied in 2015, and may be oversupplied by 1 million barrels per day."
Oil prices fell below $80 last week as the market worried about the global OPEC members, which export 40% of their oil, will not cut production.
Gray said "a clear and convincing agreement" from OPEC to cut production would lead to a price recovery, but added that this was not the market's consensus expectation.
Oil prices are down more than 30% from their mid-June highs. HSBC said the drop in oil prices was due to a "perfect storm" of weakening global demand, surging supply from North America, rising piezoelectric ceramic output and continued strength in the dollar.
Capital Economics said that the recent decline in oil prices seems to drag down the Eurozone CPI into negative growth in the next few months, and the risk of falling into long-term and harmful deflation is increasing.
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