Natixis in its latest outlook have kept oil price forecast unchanged from Sep15. “We expect Brent to average $46/bbl in 2015Q4 and around $48.5/bbl in 2016,” the report says. Given the amount of excess in the market, and the continued resilience shown by US oil producers alongside the OPEC market share strategy, oil prices could dip below cash costs of production for a brief period and then taking longer than the “2008-09 period” to recover.

“We see oil prices recovering to close to $54/bbl towards the end of 2016 if there are no significant changes to the fundamentals or geopolitical risks.”

In the first and second quarters of 2016 Brent may average $44/bbl and $46/bbl respectively before recovering towards the end of the year to $54/bbl. WTI should average $43/bbl in 2015Q4 and then $45.3/bbl in 2016.

“Aside from our central scenario we have a high and low case scenarios if non-OPEC (especially US) production declines aggressively (high case) or OPEC produces more than expected coupled with continued US shale resilience (low case).”
Source: Natixis