150 Million Barrels To Go
The OPEC production cuts are finally working. OECD petroleum stocks have tightened, with about half the distance to OPEC’s target still to go. New pipelines coming on line now will improve takeaway capacity in the Permian, permitting more production growth than last year. Operators can easily achieve that by completing their swollen inventory of drilled-but-uncompleted wells, all while maintaining the illusion of “discipline” that Wall Street demands, which should be a plus for stock prices. For the first half of 2018 we are nudging our expected price range higher, to a range from $60 to $70, with upside over-shoots expected. After the Saudi Aramco IPO we will re-evaluate based on Saudi’s revealed intention for managing the balance of volumes and price.