Oil Has Upside Of $44, Downside Of $28 For 2016 According To New Data

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In the face of persistent pricing weakness, Credit Suisse is the latest firm to lower its crude oil pricing forecast for 2016 and beyond.

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Credit Suisse is now calling for average WTI crude prices of $30/bbl in Q1 of 2016, $38/bbl for 2016 as a whole and $54/bbl for 2017.

The Bulls And The Bears

Perhaps most importantly for oil bulls, the firm believes that the worst-case scenario for oil prices still eventually puts them at $60/bbl.

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Even in the bear scenario, we believe prices will converge back to the $60/b levels required to grow American shale in the next few years, Credit Suisse analyst Jan Stuart explained. The bear-case scenario includes a global economic downturn that would push oil demand growth to about 1.0 percent in 2016 and zero in 2017.

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Conversely, Stuart noted that the firms bull-case scenario puts WTI prices as high as $75/bbl in 2017 on robust demand growth and lower OPEC production growth.

The United States Oil Fund LP (ETF) (USO) is already down 16.7 percent so far in 2016.

Disclosure: The author holds no position in the stocks mentioned.

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