"The EIA issued its monthly Short Term Outlook Report Nov. 10, leaving unchanged its oil price forecasts for 2015, and lowering its expectations for 2016. The EIA expects WTI to average $50/bbl in 2015 and $51/bbl in 2016; Brent at $54/bbl in 2015, and $56/bbl in 2016. After U.S. oil output hit a high of 9.6 million barrels per day (bpd) in April 2015, the EIA estimated that production in October fell by 40,000 bpd compared to September. Although the agency forecasts U.S. production to continue falling off through the third quarter of 2016 (to an average of 8.8 million b/d for the full-year 2016), the reduction in supply should not be enough to offset increasing supply from OPEC countries (including the possible return of Iranian crude as soon as January 2016), and from non-OPEC countries, such as Russia."
The WTI avg of $51 in 2016 is painful. Not so long ago pundits "forecasted" trading range of $55-$60.
Any modeling of SSN revenue ought to be done with $51, low of $46 and high of $56 to give a risked range, then apply the Bakken discount to get before hedging amounts.
SSN Price at posting:
0.5¢ Sentiment: None Disclosure: Not Held
