(Reuters) – Crude oil prices are likely to bottom out in the first half of 2015, until a possible slowdown in U.S. shale production counters a supply glut exacerbated by OPEC’s decision not to cut output, a Reuters monthly survey showed.
The Organization of the Petroleum Exporting Countries’ agreement last month to stand pat on output meant the onus for any supply cutbacks was now on non-OPEC producers, primarily led by U.S. shale oil, analysts said.
“Oil prices will be lower, making shale oil production less attractive for investments, which are necessary to keep shale oil production growing,” Commerzbank’s Carsten Fritsch said.
Oil is seen recovering in the second half as non-OPEC production responds to lower prices, while demand picks up in the course of the year, the poll showed.
The survey of 30 economists and analysts projected Brent to average $74.00 a barrel next year and $80.30 in 2016.
The forecast for 2015 is $8.50 below the average projection in the previous Reuters poll. The November poll number was down $11.20 from October, marking the biggest downgrade in average forecasts since the 2008 economic downturn.