Goldman Sees Oil Staying Below $50… Bloomberg

From Jeff Currie, Goldman via Bloomberg:

“While international oil companies have curtailed capital expenditures, investments made when oil was over $100 means new capacity is due to come online for most of the rest of the decade with the “sweet spot” being 2017 and 2018, Currie said. Even when the cuts take effect by about 2020, it won’t necessarily mean higher oil prices.
Low-cost producers such as Saudi Arabia and Russia will probably raise output to “offset some of that loss,” he said. “Then the question is how much of that high-cost production gets reconfigured and brought online anyway, at lower costs? You’re seeing that happening, re-engineering of large-scale projects to get them below $50 a barrel.””

Here is the link: http://www.bloomberg.com/news/articles/2016-09-14/goldman-s-currie-sees-oil-staying-below-50-as-surplus-lingers?

Forecasting oil prices is an imprecise game (a random Uber driver would do better than Wall Street economists, I’m sure), but I haven’t heard the interesting take that many projects are still coming online through 2018…