Analysts at Oppenheimer published a research note this week titled, Is $65-75 Oil The New Normal? Is OPEC Relevant? which sets out the case for oil prices remaining depressed for the foreseeable future.
The note cites similar factors to those put forward by Goldman Sachs earlier in the month. Goldman believes that a new “world order” is ahead for oil markets.
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Oppenheimer: Oil the new normal
Oppenheimer’s figures suggest that the new normal for oil prices is in the $65-$75/bbl range as significantly higher or significantly lower prices are not supported by market fundamentals.
“Oil cycles usually go through five phases; shock, denial, panic, capitulation and finally consolidation. The vast majority of oil companies are living beyond their means, with operating cash flow falling short of capital investments...
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