JP Morgan slashed its 2018 WTI forecast by US$11—from US$53.50 to US$42. The price projection for Brent was also axed, by US$10, from US$55.50 to US$45.
The US shale-vs-OPEC-cuts tale has been the predominant theme in oil markets this year, and like the cartel's output cut, it will be rolling over into next year as well.
Major banks, the same that at the time of the initial OPEC deal were seeing the markets tightening and glut eliminated as soon as the second or third quarter this year, have started slashing their oil price forecasts for this year and next, as the 6-month OPEC deal failed to rebalance the markets and cuts were extended into March 2018.
US shale production is expected to continue growing through this year and into next year. Meanwhile JP Morgan sees OPEC's extension deal as having no exit strategy, with the cartel not communicating what its end game is.
1) www.oilprice.com
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