Oil Prices Will Rise in 2017

Short term supply and demand factors should mean a spike in oil prices to $60 a barrel in 2017 - but long term this should fall back to $55 say analysts

Morningstar Equity Analysts 10 January, 2017 | 10:07AM
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Morningstar analysts are feeling bullish on oil prices for 2017, as U.S. production growth is expected to lag any increase in rig activity by six to nine months. But once it gets rolling, shale production should start to grow briskly, which means that much softer industry fundamentals are likely to return once OPEC unwinds its production cuts.

We are raising our 2017 WTI price forecast to $60 per barrel from $50

Based on current 2017 supply and demand fundamentals, our new base case for the United States is a 500-rig scenario, in which the horizontal tight oil rig count increases 30% from today’s 380 over the next six months. Our forecasts demonstrate that U.S. shale growth can be substantial at activity levels that remain well below pre-downturn levels.

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Morningstar Equity Analysts  Morningstar stock and fund analysts cover 2,000 mutual funds, 2,100 equities, and 300 exchange-traded funds.