On a daily candle Ichimoku chart, the price fell ahead of negative cloud with somewhat burden from high level of MACD.
GS lowered target level to 38 dollar per a barrel, 42, 40, and 45 in 1 month, 3, 6, and 12 month, respectively. 2016 target is 45 USD/bbl, which is around last Friday's price, 44.63. Their previous target price was 57, and current implied price in forward is at 51.
Moreover, they consider $20/bbl as a downside potential price.
However, there are nothing special rationales in GS report.
They suggest the oil market is even more oversupplied than they had expected and they forecast this surplus to persist in 2016 on
(1) further OPEC production growth,
(2) resilient non-OPEC supply
(3) and slowing demand growth with skewed to even weaker demand given China's slowdown and its negative EM feedback loop.
At the same time, they provide below picture.
They argue the surplus condition would remain until 3rd quarter next year, so this over supply should weigh on the oil price continuously.
But, let's draw a pointing line as a given red line meaning the growth momentum. The size of over-supply starts to decline since 2nd quarter this year seen as an inflection point. As I know and experienced, the growth rate or momentum is more important than whether the level is positive or negative in financial markets. Besides, I don't believe additional turmoil in Chinese demand capacities.
Goldman Sachs is bluffing, even now, I think.
However, there are nothing special rationales in GS report.
They suggest the oil market is even more oversupplied than they had expected and they forecast this surplus to persist in 2016 on
(1) further OPEC production growth,
(2) resilient non-OPEC supply
(3) and slowing demand growth with skewed to even weaker demand given China's slowdown and its negative EM feedback loop.
At the same time, they provide below picture.
They argue the surplus condition would remain until 3rd quarter next year, so this over supply should weigh on the oil price continuously.
But, let's draw a pointing line as a given red line meaning the growth momentum. The size of over-supply starts to decline since 2nd quarter this year seen as an inflection point. As I know and experienced, the growth rate or momentum is more important than whether the level is positive or negative in financial markets. Besides, I don't believe additional turmoil in Chinese demand capacities.
Goldman Sachs is bluffing, even now, I think.
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