Oil Downgraded Short Term

Heffernan Capital Management research shows that Oil may decline over the next 14 days as Libya could boost output to 180,000 barrels a day by September, 460,000 barrels a day by the end of the year and hit 900,000 at the end of 2012, Shayne Heffernan said today.

West Texas Intermediate crude may average $87 a barrel over the next three months. The opportunity will be to buy Oil Equities as the commodity price falls, we are looking at Eni S.p.A. (ADR) ( E ), TOTAL S.A. (ADR) ( TOT ), Royal Dutch Shell plc (ADR) (NYSE:RDS.A), Royal Quantum Group, Inc. PINK:RYQG. "We have not lowered our long term outlook on the Oil Price as we do not see a prolonged global economic slowdown.' Shayne Heffernan said.

Libya's National Transitional Council plans to resume production "in a few weeks," Ahmed Jehani, chairman of the rebels' stabilization team, said Aug. 23 in Dubai. Output may take a year to reach the previous total of 1.5 million barrels a day, he said. Production from Libya, which holds Africa's largest oil reserves, slumped to 60,000 barrels a day in July, according to the Paris-based International Energy Agency.

JP Morgan and Citibank Group both trimmed their projected prices for crude this week, citing waning oil demand forecasts and an improving supply picture, reported. Morgan Stanley and Goldman Sachs sounded notes of caution.

Citigroup's projections were the most dramatic. The bank cut its price forecast for the US benchmark West Texas Intermediate crude to $72 a barrel for 2012 down from a previous forecast of $80. Crude oil contracts were selling for more than $85 a barrel yesterday.

JP Morgan also lowered its price projection, tipping Europe's benchmark crude, Brent, would slip $9 next year to $115 a barrel. Goldman Sachs acknowledged that a speedy end to violence in Libya could boost the world's oil supply. Morgan Stanley said a return of Libyan production would dent its oil price outlook in the short-term.

Oil prices, which peaked at $140 a barrel in 2008, crashed to $30 a barrel when the global financial crisis hit and demand bottomed out. This week's revised price forecasts carry significant weight in oil markets and are watched closely by investors for signals of where the market is headed.

Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Markets Videos