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